The consumer side of political capital: evidence from customer complaints

Abstract

Political connections can provide firms with reputational and financial advantages, but whether these benefits extend to consumers remains unclear. Using 22,644 firm-year observations from Chinese listed firms over 2018-2023, we examine how managerial political connections relate to customer complaints. We find that stronger political connections are negatively associated with the customer complaint measure, and this association is more pronounced when reputational concerns are greater and when access to financial resources is more valuable. Difference-in-differences analyses around China’s anti-corruption campaign, together with evidence on innovation, customer-oriented practices, product-r..