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Moritz Hennicke, ECARES Print
Friday, 14 December 2018, 12:15 - 13:15

Moritz Hennicke, ECARES

The Mass Privatization Program of the German Treuhandanstalt: New Evidence from Administrative Data 

The Treuhand privatization agency became the defining actor of Germany’s reunification. As probably the largest industrial holding in history, its mission was to restructure and privatize the state-owned enterprises of the former German Democratic Republic. The mass privatization program represents an experiment of unparalleled scale for the study of bureaucracies, politics and markets. The new dataset comprises of the whole universe of firms over space and time. New stylised facts of the privatization process are unveiled. 

Betting on the Wrong Horse: Lobbying on TPP and the 2016 U.S. presidential election (with Michael Blanga-Gubbay)

Recent trade agreements have moved beyond tariff reductions, encompassing provisions and obligations related to non-tariff issues. These aspects are often seen as the reflection of interest groups, able to manipulate and extract additional rents from the ratification of these agreements. We provide causal empirical evidence that corporate lobbying on trade agreements matters for corporate profits. We use the historical shock to U.S. trade policy - the non-ratification of the Trans-Pacific Partnership (TPP) - following the unexpected victory of Donald Trump in the 2016 U.S. presidential election. We find that stock prices of companies that lobbied in favor of the agreement underperformed following the election. Lobbying firms displayed multiple consecutive days of negative returns, compared to the market benchmark that remained positive over the same period. Analayzing the cumulative impact of the shock, we show that this negative effect was persistent. Finally, on the intensive margin, we find a strong and positive relationship between the amount spent in lobbying and the cumulative losses of lobbying firms. Our results are robust to controlling for the general political leaning of companies and by restricting our analysis to firms that self-select into lobbying on other trade-related issues.

Location: R42.2.113
Contact: Nancy De Munck - This e-mail address is being protected from spam bots, you need JavaScript enabled to view it