The Value of Corporate Political Connections: Evidence from Sudden Deaths

11 Pages Posted: 21 Sep 2017 Last revised: 9 Sep 2018

See all articles by Viktar Fedaseyeu

Viktar Fedaseyeu

China Europe International Business School (CEIBS)

Lev Lvovskiy

BEROC

Date Written: September 1, 2018

Abstract

We present new causal estimates of firm-value benefits generated by political connections. Our identification strategy uses sudden deaths of U.S. Representatives and Senators as a source of exogenous variation. We find that firms contributing to the deceased politicians lose, on average, 0.60% of their equity value within one week after the politician’s death. Our results support the notion that campaign contributions to political candidates may serve as a useful measure of firms’ political connections.

Keywords: firm value, political connections, campaign contributions, political activism, PACs, sudden deaths, natural experiment

JEL Classification: D72, G38, H89, P16

Suggested Citation

Fedaseyeu, Viktar and Lvovskiy, Lev, The Value of Corporate Political Connections: Evidence from Sudden Deaths (September 1, 2018). Available at SSRN: https://ssrn.com/abstract=3040039 or http://dx.doi.org/10.2139/ssrn.3040039

Viktar Fedaseyeu (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

HOME PAGE: http://https://www.ceibs.edu/fviktar

Lev Lvovskiy

BEROC ( email )

Minsk
Belarus

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