Corporate Contributions to Ballot Measure Campaigns: Real Effects and Valuation

65 Pages Posted: 10 Mar 2021 Last revised: 17 Jul 2023

See all articles by Rüdiger Fahlenbrach

Rüdiger Fahlenbrach

École Polytechnique Fédérale de Lausanne (EPFL); Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Alexei V. Ovtchinnikov

HEC Paris - Finance Department

Philip Valta

University of Bern

Date Written: July 09, 2024

Abstract

We analyze novel data on corporate contributions to ballot initiatives at the U.S. state level. Firms make significant contributions to ballot measure campaigns in favor of or against specific initiatives. They contribute significantly more to business initiatives compared to ideological initiatives. Ballot initiatives have important consequences for firms. While all firms in affected industries experience changes in sales growth following the passage of important ballot measures, contributing firms experience an additional, economically large effect. Following successful (failed) initiatives, all firms in affected industries exhibit significantly more positive (negative) CARs around the election but contributing firms do more so than peers.

Keywords: Ballot initiatives, Direct democracy, Corporate political contributions, Real effects

JEL Classification: G30, G32, D72

Suggested Citation

Fahlenbrach, Rüdiger and Ovtchinnikov, Alexei V. and Valta, Philip,
Corporate Contributions to Ballot Measure Campaigns: Real Effects and Valuation
(July 09, 2024). Swiss Finance Institute Research Paper No. 21-23, Available at SSRN: https://ssrn.com/abstract=3801024 or http://dx.doi.org/10.2139/ssrn.3801024

Rüdiger Fahlenbrach (Contact Author)

École Polytechnique Fédérale de Lausanne (EPFL) ( email )

Quartier UNIL-Dorigny
Extranef 211
1015 Lausanne, CH-1015
Switzerland
++41-21-693-0098 (Phone)
++41-21-693-3010 (Fax)

HOME PAGE: http://https://www.epfl.ch/labs/sfi-rf/

Swiss Finance Institute

c/o University of Geneva
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CH-1211 Geneva 4
Switzerland

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Alexei V. Ovtchinnikov

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Philip Valta

University of Bern ( email )

Engehaldenstrasse 4
Bern, 3012
Switzerland

HOME PAGE: http://https://www.ifm.unibe.ch/about_us/people/prof_dr_valta_philip/

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