Premium
Corporate Political Contributions and Stock Returns
Author(s) -
COOPER MICHAEL J.,
GULEN HUSEYIN,
OVTCHINNIKOV ALEXEI V.
Publication year - 2010
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.2009.01548.x
Subject(s) - construct (python library) , stock (firearms) , politics , business , economics , econometrics , finance , financial economics , political science , engineering , computer science , mechanical engineering , law , programming language
We develop a new and comprehensive database of firm‐level contributions to U.S. political campaigns from 1979 to 2004. We construct variables that measure the extent of firm support for candidates. We find that these measures are positively and significantly correlated with the cross‐section of future returns. The effect is strongest for firms that support a greater number of candidates that hold office in the same state that the firm is based. In addition, there are stronger effects for firms whose contributions are slanted toward House candidates and Democrats.