Changes in the Electorate and Firm Values: Evidence from the Introduction of Female Suffrage in Switzerland

36 Pages Posted: 28 Jan 2019 Last revised: 29 Jul 2021

See all articles by Jörg Stahl

Jörg Stahl

Católica Lisbon School of Business & Economics

Date Written: July 28, 2021

Abstract

This paper analyzes the effect of the composition of the electorate on corporate prospects. Electorates constantly change, and support-maximizing policymakers adjust their legislative behavior to accommodate shifts in voter preferences. If the policy adjustments affect individual firms or entire industries, anticipating the effects is crucial for corporate decision-makers. In this paper, I analyze a large-scale shock to the composition of the electorate - the introduction of female suffrage in Switzerland in 1971. Using a hand-collected dataset on Swiss firm level data and security prices, I show that investor responses and firm profitability are sensitive to expected changes in government policies that reflect female voters' preferences. The results emphasize that considering the evolution of the electorate and its impact on policymaking should be an integral part of corporate strategies.

Keywords: composition of the electorate; female suffrage; legislative adjustments; corporate prospects

JEL Classification: D72, H5, G14

Suggested Citation

Stahl, Jörg, Changes in the Electorate and Firm Values: Evidence from the Introduction of Female Suffrage in Switzerland (July 28, 2021). Available at SSRN: https://ssrn.com/abstract=3316987 or http://dx.doi.org/10.2139/ssrn.3316987

Jörg Stahl (Contact Author)

Católica Lisbon School of Business & Economics ( email )

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