Officials’ Turnover, Facial Appearance and FDI: Evidence from China

ABSTRACT

Using the data of turnover of Chinese city-level Party secretaries and mayors over the period 2001–2016, this paper explores the impact of officials’ turnover on foreign direct investment (FDI) inflows. We further measure the facial attractiveness score of the new official according to their official photographs and investigate the role of facial appearance of official. The results indicate that turnover of a Party secretary does not show a significant impact on FDI inflows, but in the year of a mayor’s turnover, there are fewer FDI inflows and the effect is greater when the new mayor has a lower level of facial appearance. Moreover, the impact of mayors’ turnover and facial appearance only exists in regions with lower investor protection.

KEYWORDS:

• Officials’ turnover
• facial appearance
• fdi inflows
• investor protection

JEL:

• F21
• H70
• G18

Acknowledgments

The authors acknowledge financial support from the Project of Humanities and Social Science from MOE of China (18YJC790129), the Natural Science Foundation of Shandong Province (ZR2018QG006), the Program of Qilu Young Scholars of Shandong University, and the Taishan Scholar Program of Shandong Province.

Disclosure statement

There are no conflicts of interest.

Notes

1. It should be noted that local officials refer to the Party secretaries and mayors of municipal government who have the decision-making authority in China.

2. As FDI is measured in US dollars, we convert into RMB according to the average exchange rate of that year which are obtained from the State Administration of Foreign Exchange of China (www.safe.gov.cn).

3. The website requires the user to upload a photograph and places seventeen different markers at different facial landmarks on the photograph, and then scores each face based on its proprietary algorithm. Moreover, the website also provides some guidance on which factor contribute to the score: horizontal symmetry, the ratio of eye width compared to innerocular distance, the ratio of nose to ear length, the ratio of face width to face height, the ratio of nose width to face width, and the ratio of mouth width to nose width. Unfortunately, the website can’t be accessed recently. For more information on the measurement of facial appearance, please refer to the descriptions in Halford and Hsu (2020).

Additional information

Funding

This work was supported by the the Program of Qilu Young Scholars of Shandong University; the Taishan Scholar Program of Shandong Province; the Natural Science Foundation of Shandong Province [ZR2018QG006]; the Project of Humanities and Social Science from MOE of China [18YJC790129].