Theses Doctoral

Three Essays on the Political Economy of Business Mobility: Electoral and Policy Implications of Business Location Decisions

Yang, Joonseok

The key underlying question of this dissertation is whether and how business actors are able to use their heightened mobility to affect electoral outcomes and constrain the policy choices of elected officials. Focusing on cases of interstate corporate headquarters (HQ) relocation and its effects on gubernatorial elections, this dissertation investigates the electoral effects of HQ relocation and its implications for policy. The first chapter examines electoral effects of interstate HQ relocation. My analysis shows that HQ relocation generates electoral responses but in an asymmetrical manner between HQ inflow and HQ outflow: when HQ relocate in, citizens tend to vote for the incumbent party in gubernatorial elections, expecting similar positive events to continue. When HQ relocate out, voters increase support for the Republican Party in an effort to lower the chances of recurrence. This is because of the pervasive belief that the Democratic Party tends to pursue the main policy drivers of HQ outflow---high corporate tax rates and less- friendly business environments. Building upon the findings in the first chapter, the second chapter investigates whether the asymmetric responses of voters to HQ relocation gives rise to different practices in offering lucrative tax incentives depending on the partisanship of the elected officials. The analysis provides evidence that mobile firms such as multinational corporations and firms operating in multiple states, pay lower effective corporate tax rates under Democratic governors than Republican governors. Lastly, the third chapter investigates microfoundtional support for partisan blame attributions in the wake of HQ relocation using a survey experiment. I find that the effects of party label only prevail in the aftermath of an HQ outflow since voters believe that Democrat politicians tend to support high corporate tax rates and less-friendly business environments, which, these voters believe, push corporate HQ out of their states. The findings of my dissertation have implications for the political economy of business-government relationships, broad debates on the effects of economic globalization on policy levers of governments, and our understanding of electoral accountability.


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More About This Work

Academic Units
Political Science
Thesis Advisors
Erikson, Robert S.
Ph.D., Columbia University
Published Here
August 1, 2019