Executives in Politics

54 Pages Posted: 26 Nov 2017 Last revised: 28 May 2019

See all articles by Ilona Babenko

Ilona Babenko

Arizona State University

Viktar Fedaseyeu

China Europe International Business School (CEIBS)

Song Zhang

Boston College - Department of Finance

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

Babenko, Ilona and Fedaseyeu, Viktar and Zhang, Song, Executives in Politics (May 23, 2019). BAFFI CAREFIN Centre Research Paper No. 2017-62; Finance Down Under 2019 Building on the Best from the Cellars of Finance. Available at SSRN: https://ssrn.com/abstract=3075177 or http://dx.doi.org/10.2139/ssrn.3075177

Ilona Babenko

Arizona State University ( email )

Department of Finance
W.P. Carey School of Business
Tempe, AZ 85287
United States

Viktar Fedaseyeu (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206

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

Song Zhang

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States

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