Political Catastrophe and Firm Strategies: Evidence from the Capitol Riot

19 Pages Posted: 6 May 2022

See all articles by Anqi Jiao

Anqi Jiao

Capital University of Economics and Business

Han Ma

Shanghai University of Economics and Finance

Honglin Ren

Renmin University of China - School of Business

Date Written: May 3, 2022

Abstract

This study explores firms’ reactions to the 2021 U.S. Capitol Attack. We find that firms donating more to the 147 Republicans who voted to overturn the 2020 presidential election are more likely to speak out against the Capitol Attack to suspend political contributions. By doing so, firms mitigate negative stock market reactions and subsequently lower their political risk. Suspension of corporate political donations has profound impacts on the 147 Republicans that they almost lost all political contributions from private sectors right after the Capitol Attack. Our findings suggest that, when facing unexpected political catastrophes, firms make strategic political activist actions.

Keywords: Capitol attack, political activism, political catastrophe, firm strategies

JEL Classification: P16, G32

Suggested Citation

Jiao, Anqi and Ma, Han and Ren, Honglin, Political Catastrophe and Firm Strategies: Evidence from the Capitol Riot (May 3, 2022). Finance Research Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4099218

Anqi Jiao

Capital University of Economics and Business ( email )

Beijing
China

Han Ma

Shanghai University of Economics and Finance ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

Honglin Ren (Contact Author)

Renmin University of China - School of Business ( email )

Beijing
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
53
Abstract Views
255
Rank
717,673
PlumX Metrics