Political Influence and the Renegotiation of Government Contracts
研究发现，有政治关联的企业在政府合同竞标中先报低价，再通过重新谈判提高金额、延长工期、调整激励，从而提升企业价值。
Abstract This paper provides novel evidence that corporate political influence operates through renegotiations of existing government contracts. Using detailed data on contractual terms and renegotiations around sudden deaths and resignations of local politicians, the estimates show that politically connected firms initially bid low and successfully renegotiate contract amounts, deadlines, and incentives. The effects hold across different industries and contract types, enhance firm value, and persist around the exogenous increase in contract supply due to the American Recovery and Reinvestment Act. Overall, this paper establishes an unexplored link between political influence, ex post renegotiations, and ex ante bidding of government contracts.