Surprise election for Trump connections

• 成果类型: Article
• 署名作者: Child, Travers Barclay; Massoud, Nadia; Schabus, Mario; Zhou, Yifan
• 署名单位: China Europe International Business School; University of Melbourne; Michigan State University; Michigan State University's Broad College of Business; Fudan University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2020.12.004
• 发表日期: 2021
• 关键词: political connections; event study; firm performance; Donald Trump

摘要

We exploit Donald Trump's nonpolitical background and surprise election victory to identify the value of sudden presidential ties among S&P 500 firms. In our setting firms did not choose to become politically connected, so we identify treatment effects comparatively free of selection bias prevalent in this literature. Firms with presidential ties enjoyed greater abnormal returns around the 2016 election. Since Trump's inauguration, connected firms had better performance, received more government contracts, and were less subject to unfavorable regulatory actions. We rule out a number of confounding factors, including industry designation, sensitivity to Republican platforms, campaign finance, and lobbying expenditures. (C) 2020 The Authors. Published by Elsevier B.V.