Campaign Contributions Over CEOs’ Careers

51 Pages Posted: 14 Jan 2012 Last revised: 15 May 2012

See all articles by Brian Kelleher Richter

Brian Kelleher Richter

University of Texas at Austin - Red McCombs School of Business

Adam Fremeth

University of Western Ontario - Richard Ivey School of Business

Brandon Schaufele

University of Western Ontario - Richard Ivey School of Business

Date Written: January 24, 2012

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

Suggested Citation

Richter, Brian Kelleher and Fremeth, Adam and Schaufele, Brandon, Campaign Contributions Over CEOs’ Careers (January 24, 2012). Available at SSRN: https://ssrn.com/abstract=1984387 or http://dx.doi.org/10.2139/ssrn.1984387

Brian Kelleher Richter (Contact Author)

University of Texas at Austin - Red McCombs School of Business ( email )

2100 Speedway
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Austin, TX 78712
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512-232-6751 (Phone)

HOME PAGE: http://briankrichter.com/

Adam Fremeth

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

Brandon Schaufele

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

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