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Social Media and Political Donations: New Technology and Incumbency Advantage in the United States

65 Pages Posted: 9 Sep 2016 Last revised: 5 Feb 2017

Maria Petrova

Barcelona Graduate School of Economics (Barcelona GSE)

Ananya Sen

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Pinar Yildirim

University of Pennsylvania - The Wharton School

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Date Written: September 8, 2016

Abstract

Do new technologies change the way political markets work in a democracy? We study the impact of adopting a new technology on campaign contributions received by candidates running for the U.S. Congress. To identify the causal impact of joining Twitter, we compare donations just before and just after politicians open an account in regions with high and low levels of Twitter penetration, controlling for politician-month fixed effects. We estimate that opening a Twitter account amounts to an increase of at least 2-3% percent in donations per campaign. Moreover, this effect holds only for inexperienced politicians who have never been elected to the Congress before. Placebo checks suggest that this impact is not driven by concurrent increase in information about these politicians in newspapers or blogs, TV ads, or campaign expenditures. The gain from opening a Twitter account is stronger for donations coming from new as opposed to repeat donors, for politicians who tweet more informatively, and for politicians from regions with lower newspaper circulation. Overall, our findings suggest that a new communication technology can lower the barriers to entry in political contests by increasing new politicians' opportunities of informing voters and fund-raising.

Keywords: social media, Twitter, political donations, elections, political candidates

JEL Classification: D72, M2, M3

Suggested Citation

Petrova, Maria and Sen, Ananya and Yildirim, Pinar, Social Media and Political Donations: New Technology and Incumbency Advantage in the United States (September 8, 2016). Available at SSRN: https://ssrn.com/abstract=2836323 or http://dx.doi.org/10.2139/ssrn.2836323

Maria Petrova

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Ananya Sen

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave. E62-663
Cambridge, MA 02142
United States

Pinar Yildirim (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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