Executives in Politics
54 Pages Posted: 26 Nov 2017 Last revised: 28 May 2019
Date Written: May 23, 2019
The share of former corporate executives in federal elected office increased from 13.3% in 1980 to 21.1% in 2014. This increase was partly driven by greater exposure to competition from China and increase in federal regulation. When executives win elections and when Congress passes legislation introduced by them, their firms experience significant positive stock returns. Textual analysis indicates that bills introduced by businessman politicians exhibit a more negative attitude toward China and have fewer regulatory restrictions than bills introduced by non-businessman politicians. Finally, businessman politicians vote for legislation supported by pro-business interest groups but against legislation supported by labor unions.
Keywords: businessman politicians, executives, regulation, corporate political connections
JEL Classification: G32, G38, D72, G30
Suggested Citation: Suggested Citation