Political Activism and Firm Innovation
Journal of financial and quantitative analysis, Forthcoming
55 Pages Posted: 14 Dec 2015 Last revised: 21 Feb 2019
Date Written: February 18, 2019
We hypothesize that political activism is valuable because it helps reduce political uncertainty, which, in turn, fosters firm innovation. We find that firms that support more politicians, winning politicians, politicians on Congressional committees with jurisdictional authority over the firms' industries, and politicians who join those committees innovate more. We employ a natural experiment to show a causal effect of political activism on innovation. We also show evidence of intra-industry and geographical political activism spillovers.
Keywords: political contributions, innovation, investment policy, political uncertainty
JEL Classification: D72, D80, G31, G38, O31, O38
Suggested Citation: Suggested Citation