Gains from Early Support of a New Political Party 

Battista Severgnini (Copenhagen Business School) examines the issue of the value of political connections for businesses in Italy in the context of Silvio Berlusconi's leadership of the conservative political coalition over the last two decades.

Battista Severgnini is Associate Professor in the Department of Economics at Copenhagen Business School. Battista holds a PhD in Economics from Humboldt University, Berlin. His primary areas of interest are economic development, productivity, labour economics, sport economics and economic history. The paper is co-authored with Marco Leonardi (University of Milan and IZA), Rossella Mossucca (University of Rome Tor Vergata), and Fabiano Schivardi (Bocconi University and CEPR)

Abstract
We examine the issue of the value of political connections in the context of Italy where, over the last two decades, Silvio Berlusconi, the owner of a vast business group, has been the leader of the conservative political coalition. Using balance sheet data for the period 1985 -2010, we investigate whether firms which supported from the very start Silvio Berlusconi in his bid to become prime minister in 1994 did better than competitors over the following years. Preliminary results suggest that firms which supported the foundation of his party in 1994 did better than the competitors in terms of value added and employment but did not do significantly better in terms of productivity.

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