No. 2 RPSSE Riga/BICEPS Research papers CAMPAIGN CONTRIBUTIONS AND FIRM PERFORMANCE: THE ‘LATVIAN WAY’ Vyacheslav Dombrovsky Stockholm School of Economics in Riga BICEPS July 2008 Postal address: Strēlnieku iela 4a, Riga, LV-1010, Latvia Telephone: +371 67039320 Fax: +371 67830249 Website: www.sseriga.edu / www.biceps.org CAMPAIGN CONTRIBUTIONS AND FIRM PERFORMANCE: THE ‘LATVIAN WAY’ Vyacheclav Dombrovsky1 July 2008 1 Stockholm School of Economics in Riga and Baltic International Centre for Economic Policy Studies, 4a Strelnieku St., Riga, LV1010, Latvia. Email:
[email protected]. I am grateful to Lursoft LLC for providing the data and especially to Girts Kebers and Verners Hils. I thank Roman Bobilev, Eugene Babaitsev, Boris Ginzburg, and Andrei Delman for excellent research assistance. I also thank participants of the 2008 Public Choice Meeting in San Antonio, and seminars in New Economic School (Moscow), SITE at Stockholm School of Economics, and Kiyev School of Economics for their valuable comments. Part of the work on this paper took place when I was a Fulbright Visiting Scholar at the Center for Study of Public Choice at George Mason University. Financial support from the Fulbright Program and the hospitality and congenial environment of the Center are gratefully acknowledged. This research was supported by a grant from the CERGE-EI Foundation under a program of the Global Development Network. All opinions expressed are those of the author and have not been endorsed by the CERGE-EI, GDN, or the Fulbright Program. 1 CAMPAIGN CONTRIBUTIONS AND FIRM PERFORMANCE: THE ‘LATVIAN WAY’ This paper examines the effect of campaign contributions on firm performance in Latvia, using a quasi-experiment provided by the 2002 elections.