Sovereign Wealth Fund Investments and the US Political Process

22 Pages Posted: 24 Apr 2018

See all articles by Paul Calluzzo

Paul Calluzzo

Queen's University - Smith School of Business

G. Nathan Dong

Columbia University

David Godsell

University of Illinois at Urbana-Champaign

Date Written: January 2017

Abstract

We examine US firm-level campaign finance contributions preceding and subsequent to equity investment by a sovereign wealth fund (SWF). Our empirical results suggest that SWFs are attracted to firms engaged in US campaign finance and that firm campaign finance contributions increase after SWF investment. SWF attraction to campaign finance firms increases (1) after an exogenous legal shock that liberalized corporate campaign finance activities, and (2) in a subset of industries vulnerable to recent legislation capable of inhibiting or expunging foreign investment. We provide some of the first evidence consistent with political motives for SWF investment in the United States.

Keywords: sovereign wealth fund, political contributions, foreign investment, investment determinants, government policy and regulation, political relations and regulation

Suggested Citation

Calluzzo, Paul and Nathan Dong, G. and Godsell, David, Sovereign Wealth Fund Investments and the US Political Process (January 2017). Journal of International Business Studies, Vol. 48, Issue 2, 2017, Available at SSRN: https://ssrn.com/abstract=3160756 or http://dx.doi.org/10.1057/s41267-016-0057-5

Paul Calluzzo (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

G. Nathan Dong

Columbia University

3022 Broadway
New York, NY 10027
United States

David Godsell

University of Illinois at Urbana-Champaign ( email )

Champaign, IL 61820
United States
1.217.300.0844 (Phone)

HOME PAGE: http://https://business.illinois.edu/profile/david-godsell/

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