The Value of the Revolving Door: Political Appointees and the Stock Market

Simon Luechinger

University of Lucerne

Christoph Moser

KOF Swiss Economic Institute

September 17, 2012

KOF Working Papers No. 310

We analyze stock market reactions to announcements of political appointments from the private sector and corporate appointments of former government officials. Using unique data on corporate affiliations and announcements of all Senate-confirmed U.S. Defense Department appointees of six administrations, we find positive abnormal returns for political appointments. These estimates are not driven by important observations, volatile stocks or industry-wide developments. Placebo events yield no effects. Effects are larger for top government positions and less anticipated announcements. We also find positive abnormal returns for corporate appointments. Our results suggest that conflicts of interest matter also in a country with strong institutions.

Number of Pages in PDF File: 38

Keywords: Political appointees, revolving door, conflict of interest, event study, stock market

JEL Classification: G14, D73, G30, H57

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Date posted: September 18, 2012  

Suggested Citation

Luechinger, Simon and Moser, Christoph, The Value of the Revolving Door: Political Appointees and the Stock Market (September 17, 2012). KOF Working Papers No. 310. Available at SSRN: http://ssrn.com/abstract=2147674 or http://dx.doi.org/10.2139/ssrn.2147674

Contact Information

Simon Luechinger
University of Lucerne ( email )
Frohburgstrasse 3
P.O. Box 4466
Lucerne, 6002
Christoph Moser (Contact Author)
KOF Swiss Economic Institute ( email )
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