The Franklin L. Burdette/Pi Sigma Alpha Award is presented annually by the American Political Science Association (APSA) to honor the best paper presented at the previous year’s Annual Meeting.
Shengqiao Lin is a Ph.D. candidate in the Department of Government at the University of Texas at Austin. His research centers on the political economy of state-business relations with a regional focus on China. His dissertation studies firm behavior responding to political risk in China using a mixed-methods approach that combines causal inference with observational data, computational methods, and in-depth interviews.
Citation from the Award Committee:
Shengqiao Lin’s “Addressing Risk by Doing Good: Business Responses to Policy Initiatives” stands out as the best paper presented at the 2022 APSA Annual Meeting. Lin shows, perhaps surprisingly, that private firms operating in non-democratic contexts can be incentivized to invest in government initiatives to reduce poverty when their political risk is high.
The paper makes a wonderful contribution to our understanding of how private firms address political risk in environments with weak institutions. Where private firms have high political risks, politicians can incentivize them to spend money on policy goals that are important for their career advancement. In this way, we see private firms “doing good” – and investing in poverty reduction programs – as a means of minimizing the chance that they will face government regulation and fines.
To illustrate this, the paper looks at how private firms responded to China’s Targeted Poverty Alleviation campaign, begun in 2015. It measures firm-level political risk in an innovative way, using a text-as data approach based on questions and answers between institutional investors and publicly traded firms in China. Using these data, it shows that as firm-level political risk increases, so too does expenditure on poverty reduction programs. It offers evidence, as well, that this strategy for addressing political risk is effective: firms allocating resources in this way are more likely to receive preferential treatment when they violate government regulations.
The paper is well-organized, thorough, and methodologically innovative. The findings to emerge suggest that government initiatives in non-democratic contexts that are societally beneficial – such as poverty reduction programs – can receive a boost in investments from an unexpected ally: private firms with high political risk.
APSA thanks Pi Sigma Alpha for its support of the award and the committee members for their service: Dr. Erica Frantz (chair) of Michigan State University, Dr. Justin Kirkland of the University of Virginia, and Dr. Dan Reiter Emory University.