Executives in Politics
58 Pages Posted: 26 Nov 2017 Last revised: 28 Sep 2018
Date Written: August 17, 2018
Between 1980 and 2014, the share of former corporate executives in federal elected office increased from 13.3% to 21.1%, and this increase was more pronounced among executives from regulated industries and industries most exposed to global competition. Firms whose executives win federal elections experience significant positive stock returns around the dates of elections and around the dates when Congress passes legislation introduced by their executives. Evidence from close elections shows that businessman politicians are more likely to vote for legislation supported by pro-business interest groups and less likely to vote for legislation supported by labor unions and consumer advocacy groups.
Keywords: businessman politicians, executives, regulation, corporate political connections
JEL Classification: G32, G38, D72, G30
Suggested Citation: Suggested Citation