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Do EPA Defendants Prefer Republicans? Evidence from the 2000 Election
Author(s) -
Hughes Paul
Publication year - 2006
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbj035
Subject(s) - shareholder , economics , george (robot) , enforcement , agency (philosophy) , law , politics , federal election , accounting , law and economics , political science , finance , sociology , corporate governance , social science , artificial intelligence , computer science
The election of George W. Bush as U.S. president in 2000, as measured by the Iowa Electronic Market (IEM), was associated with an increase of 3% in the share price of firms that were being sued by the Environmental Protection Agency (EPA). This is equal to approximately $100 billion of shareholder value. This finding is robust to a number of different specifications, controlling for other litigation, case law, and industry, and is not found in an otherwise similar sample of companies without litigation outstanding. It is suggested that the enforcement of environmental law is dependent on political pressure. (JEL G18, K32, G14 )