Stock Ownership and Political Behavior: Evidence from Demutualizations

Markku Kaustia (), Samuli Knüpfer and Sami Torstila ()
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Markku Kaustia: Aalto University, 00100 Helsinki, Finland
Sami Torstila: Aalto University, 00100 Helsinki, Finland

Management Science, 2016, vol. 62, issue 4, 945-963

Abstract: A setting in which customer-owned mutual companies converted to publicly listed firms created a plausibly exogenous increase in stock ownership. We use this shock to identify the effect of ownership of publicly listed shares on political behavior. Using instrumental variable regressions, difference-in-differences analyses, and matching methods, we find the shock changed the way people vote in the affected areas, with the demutualizations being followed by a 1.7–2.7-percentage-point increase in right-of-center vote share. Analyses of demutualizations that did not involve public listing of shares suggest that explanations based on wealth, liquidity, and tax-related incentives do not drive the results, and that the ownership of publicly listed shares was instrumental in generating the increase in conservative voting. This paper was accepted by Gustavo Manso, finance.

Keywords: stock ownership; political behavior; salience; attention; identity (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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http://dx.doi.org/10.1287/mnsc.2014.2135 (application/pdf)

Related works:
Working Paper: Stock ownership and political behavior: Evidence from demutualization (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:62:y:2016:i:4:p:945-963

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