The influence of political bias in state pension funds

• 成果类型: Article
• 署名作者: Bradley, Daniel; Pantzalis, Christos; Yuan, Xiaojing
• 署名单位: State University System of Florida; University of South Florida; University of Massachusetts System; University of Massachusetts Lowell
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.08.017
• 发表日期: 2016
• 页码: 69-91
• 关键词: State pension funds; Political bias; Pension beneficiaries; Disposition effect

摘要

Using a sample of state pension funds' equity holdings, we find evidence of not only local bias, but also bias towards politically-connected stocks. Political bias is detrimental to fund performance. State pension funds have longer holding durations of politically-connected local firms and display disposition behavior in these positions. Political bias is positively related to the percentage of politically-affiliated trustees on the board and Congressional connections. The more politically-affiliated trustees on the board, the more the fund shifts toward risky asset allocations. Overall, our results imply that political bias is likely costly to taxpayers and pension beneficiaries. (C) 2015 Elsevier B.V. All rights reserved.