The Value of Connections in Turbulent Times: Evidence from the United States

Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton

No 19701, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small network of financial sector executives during a time of acute crisis and heightened policy discretion.

JEL-codes: G01 G14 G21 G28 (search for similar items in EconPapers)
Date: 2013-12
Note: CF POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

Published as Acemoglu, Daron & Johnson, Simon & Kermani, Amir & Kwak, James & Mitton, Todd, 2016. "The value of connections in turbulent times: Evidence from the United States," Journal of Financial Economics, Elsevier, vol. 121(2), pages 368-391.

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Journal Article: The value of connections in turbulent times: Evidence from the United States (2016)
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