The mortality cost of political connections

We study the relationship between the political connections of Chinese firms and workplace fatalities. The worker death rate for connected companies is five times that of unconnected firms; this result also holds when we exploit executive turnover to generate within-firm estimates. The connections-mortality relationship is attenuated in provinces where officials’ promotion is contingent on meeting safety quotas. Fatal accidents produce negative returns at connected companies and are associated with the subsequent departure of well-connected executives. Our findings emphasize the social costs, as well as the firm-level benefits, of political connections. JEL classification: J81, D73, P26