Politically motivated corporate decisions as tournament participation/inclusion games

David Feldman, Chang Mo Kang, Jiaming Li, Konark Saxena

Research output: Contribution to journalArticlepeer-review

11 Scopus citations


We introduce political tournament “participation/inclusion” games. Dominant strategies determine whether players choose to compete by enhancing economic performance. Unique Nash equilibria competitors win (only) inclusion as promotion candidates. We find empirical justification for such equilibria in Chinese province heads' periodic political tournaments/elections for promotion to the Communist Party politburo and government positions. We document pervasive tournament-synchronized corporate decision-making cyclicality. Firms enhance economic performance by increasing investments, taxes, and employment before elections. Cyclicality is dominantly driven by privately-owned enterprises, is weaker in economically/politically weak(strong) provinces. Political promotions, however, are not sensitive to corporate investments enhanced before tournaments but to long-run investments.

Original languageEnglish
Article number101883
JournalJournal of Corporate Finance
StatePublished - 1 Apr 2021
Externally publishedYes


  • Agency
  • China
  • Corporate investments
  • Participation/inclusion games
  • Politically motivated corporate decisions
  • Taxes

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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