Political Connectednessand Firm Performance:Evidence From Germany

This paper investigates politically connected rms in Germany. With the in-troduction of a new transparency law in 2007, information on additional incomesources for all members of the German parliament became publicly available.We nd that members of the conservative party (CDU/CSU) and the liberalparty (FDP) are more likely to work for rms than members of left-wing parties(SPD and The Left) or the green party (Alliance 90/The Greens). Politicallyconnected rms are larger, less risky, and have lower market valuations thanunconnected rms.[...]