DO BUSINESSMEN MAKE GOOD GOVERNORS? | Zendy

Neumeier Florian | Zendy

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DO BUSINESSMEN MAKE GOOD GOVERNORS?

Author(s) -

Neumeier Florian

Publication year - 2018

Publication title -

economic inquiry

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.823

H-Index - 72

eISSN - 1465-7295

pISSN - 0095-2583

DOI - 10.1111/ecin.12576

Subject(s) - economics , unemployment rate , chief executive officer , unemployment , labour economics , state (computer science) , stock (firearms) , matching (statistics) , monetary economics , macroeconomics , management , mechanical engineering , algorithm , computer science , engineering , statistics , mathematics

This paper evaluates the economic performance of U.S. state governors with a business background (chief executive officer [CEO] governors). Applying a matching method, I find, first, that businesspeople tend to take office in times of economic and fiscal strain. Second, the tenures of CEO governors are associated with a 0.5 percentage points (pp.) higher annual income growth rate, a 0.4 pp. higher growth rate of the private capital stock, and a 0.6 pp. lower unemployment rate than are the tenures of non‐CEO governors. State‐level income inequality is not affected by CEO governors holding office, indicating that low‐income households benefit from the economic upswing. ( JEL C21, E24, O47)

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