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http://ssrn.com/abstract=1732750
 
 

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Individual Political Contributions and Firm Performance


Alexei V. Ovtchinnikov


HEC Paris - Finance Department

Eva Pantaleoni


Vanderbilt Kennedy Center

December 30, 2010

AFA 2012 Chicago Meetings Paper

Abstract:     
We present evidence that individuals make political contributions strategically by targeting politicians with power to affect their economic well-being. Individuals in Congressional districts with greater industry clustering choose to support politicians with jurisdiction over the industry. Importantly, individual political contributions are associated with improvements in operating performance of firms in industry clusters. The relation between contributions and firm performance is strongest for poorly performing firms, firms closer to financial distress, and for contributions in close elections. The results imply that individual political contributions are valuable to firms, especially during bad economic times.

Number of Pages in PDF File: 51

Keywords: Political contributions, firm performance, firm value

JEL Classification: G30, G33, G38

working papers series


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Date posted: January 1, 2011 ; Last revised: March 14, 2013

Suggested Citation

Ovtchinnikov, Alexei V. and Pantaleoni, Eva, Individual Political Contributions and Firm Performance (December 30, 2010). AFA 2012 Chicago Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1732750 or http://dx.doi.org/10.2139/ssrn.1732750

Contact Information

Alexei V. Ovtchinnikov (Contact Author)
HEC Paris (Groupe HEC) - Finance Department ( email )
1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Eva Pantaleoni
Vanderbilt Kennedy Center ( email )
Nashville, TN 37240
United States
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