Campaign Contributions Over CEOs’ Careers

Abstract

Individuals dominate money in politics, accounting for over 90% of federal campaign contributions, yet studies of individuals’ giving patterns are scarce. We construct a new dataset to examine all of the contributions made between 1991 and 2008 by all 2,198 people who served as S&P 500 CEOs for any portion of that interval. We then exploit variation in these individuals’ leadership status over this span of their careers to identify that becoming an S&P 500 CEO causes a $4,000 jump per election-cycle in personal political giving relative to these individuals’ pre-CEO contribution levels. While some fraction of CEOs’ contributions can be attributed to their long-standing preferences and their ability to contribute, the striking change in behavior we identify upon individuals taking leadership roles cannot be explained by these factors alone. Despite causing individuals to give more money to more candidates, more political action committees (PACs), and more parties, serving as a CEO has little effect on partisan leanings. A battery of tests aimed at falsifying identification assumptions and exposing limits to our specifications’ robustness reinforce our findings — and demonstrate that, among other things, the patterns we identify hold whether individuals are promoted to CEO internally or are appointed externally.

Keywords: Campaign Contributions, CEOs, Leaders, Personnel Economics, PACs

JEL Classification: D72, H89, K00, M59