The Governor as the Entrepreneur in Chief: An Exploratory Analysis


Attracting and expanding businesses in the state often appear prominently in the speeches of political leaders. Do they talk the talk or do they actually follow through? Do their commitments to promote businesses matter? The talks about promoting businesses suggest that political leaders play a role in the expansion of business establishments. Though that may be true, the economics literature is silent on the ability of political leaders to alter the dynamics of business establishments. Applying machine learning algorithms to U.S governors’ State of the State Addresses from 2001 to 2013, this paper captures the level of the governors’ professed business friendly agendas; then studies the relationship between the governor’s long term commitment to his/her business agenda and business dynamics in his/her state. The paper shows that the commitment of the governor to expand business establishments in his/her state is positively associated with the growth rate of business establishments in their states. (JEL O10, R50, C38)