Public Pension Funds and Corporate Political Activism

49 Pages Posted: 4 Mar 2015 Last revised: 3 Jun 2017

Rui A. Albuquerque

Boston College, Carroll School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Zicheng Lei

University of Surrey - Finance and Accounting Group

Jörg Rocholl

ESMT European School of Management and Technology

Chendi Zhang

University of Warwick - Finance Group

Multiple version iconThere are 3 versions of this paper

Date Written: June 1, 2017

Abstract

This paper analyzes agency conflicts between U.S. public pension funds and other shareholders. It studies the landmark decision by the U.S. Supreme Court on Citizens United v. FEC, which opens new doors for political activism by business. At the ruling, politically connected firms held by public pension funds have lower announcement returns. After the ruling, these firms remain engaged in political connections and experience a relative increase in ownership by public pension funds. Our evidence is consistent with public pension funds having a preference for more traditional forms of political activism, a preference not shared by other investors.

Keywords: Institutional Investors, Political Activism, Political Contributions, Political Connections, Citizens United

JEL Classification: G14, G30

Suggested Citation

Albuquerque, Rui A. and Lei, Zicheng and Rocholl, Jörg and Zhang, Chendi, Public Pension Funds and Corporate Political Activism (June 1, 2017). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 470/2016; Paris December 2016 Finance Meeting EUROFIDAI - AFFI. Available at SSRN: https://ssrn.com/abstract=2572666 or http://dx.doi.org/10.2139/ssrn.2572666

Rui A. Albuquerque

Boston College, Carroll School of Management ( email )

140 Commonwealth Avenue
Chustnut Hill, MA 02467-3808
United States

HOME PAGE: http://ruialbuquerque.webs.com

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Zicheng Lei

University of Surrey - Finance and Accounting Group ( email )

63MS02, Rik Medlik Building
Surrey Business School
Guildford, Surrey GU2 7XH
United Kingdom
01483686372 (Phone)

Joerg Rocholl

ESMT European School of Management and Technology ( email )

Schlossplatz 1
Berlin
Germany

HOME PAGE: http://www.esmt.org/en/159244

Chendi Zhang (Contact Author)

University of Warwick - Finance Group ( email )

Gibbet Hill Rd
Coventry, CV4 7AL
Great Britain

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