Sovereign Wealth Fund Investments and the US Political Process
22 Pages Posted: 24 Apr 2018
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: Suggested Citation
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
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