Corporate Political Contributions and Stock Returns

Michael Cooper, Huseyin Gulen and Alexei Ovtchinnikov

Journal of Finance, 2010, vol. 65, issue 2, 687-724

Abstract: 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.

Date: 2010
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https://doi.org/10.1111/j.1540-6261.2009.01548.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:65:y:2010:i:2:p:687-724

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