Professor Daron Acemoglu to Deliver 2013-2014 Winter Lecture on Corporate Law and Governance
The lecture, titled “The Value of Political Connections in Turbulent Times: Evidence from the United States,” will take place in Room 127 on September 23, 2013 at 4:30 p.m.
The Winter Lecture is sponsored by the Dean’s Office and the Yale Law School Center for the Study of Corporate Law. It was established by former law clerks and students of Judge Winter to support lectures on corporate law and governance and related topics.
The lecture will discuss how companies in the United States typically do not benefit from being connected to prominent political figures, despite the opposite being true in developing countries.
“Existing evidence suggests that, while political connections are valuable in developing countries such as Malaysia, Pakistan or Indonesia, companies have traditionally gained little from being connected to powerful politicians in the United States,” said Acemoglu.
Specifically, the talk reports on recent research showing that the announcement of Timothy Geithner as then President-elect Obama's nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a personal connection. These abnormal returns continued when news broke that Geithner's confirmation might be derailed by tax issues.
“These excess returns for connected firms probably reflect the perceived impact of relying on the advice of a small network of financial sector executives during a time of acute crisis and heightened policy discretion,” said Acemoglu. “The results can also be interpreted as suggesting that part of the reason why political connections are not ordinarily valuable in the United States is the limited policy discretion of key decision-makers and connections may have become temporarily more valuable during the recent financial crisis because of heightened policy discretion.”
Professor Acemoglu’s research covers a wide range of areas within economics, including political economy, economic development and growth, human capital theory, growth theory, innovation, search theory, network economics and learning. His works have been published in leading scholarly journals, including the American Economic Review, Econometrica, Journal of Political Economy, Quarterly Journal Economics and Review of Economic Studies. Recently, Acemoglu completed a new book, along with Professor James Robinson (Harvard University), entitled Why Nations Fail: The Origin of Power, Prosperity and Poverty.
He is also a member of the Economic Growth program of the Canadian Institute of Advance Research and an elected fellow of the American Academy of Arts and Sciences, the Econometric Society, the European Economic Association, and the Society of Labor Economists.
In 2005, Professor Acemoglu received the John Bates Clark Medal, an award that is given every two years to the best economist in the United States under the age of 40 by the American Economic Association. He also holds an Honorary Doctorate from the University of Utrecht.
Acemoglu received a BA in economics at the University of York in 1989; his M.Sc. in mathematical economics and econometrics at the London School of Economics in 1990; and his Ph.D. in economics at the London School of Economics in 1992. Since 1993, he has held the academic positions of Lecturer at the London School of Economics, and Assistant Professor, Pentti Kouri Associate Professor, and Professor of Economics at MIT.