Surprise election for Trump connections

Travers Barclay Child (First Author), M. Schabus (Participant Author), Y. Zhou (Participant Author), N. Massoud (Participant Author)

Research output: Contribution to journalJournal

7 Citations (Web of Science)
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Abstract

We exploit Donald Trump’s nonpolitical background and surprise election victory to identify the value of sudden presidential ties among S&P 500 firms. In our setting firms did not choose to become politically connected, so we identify treatment effects comparatively free of selection bias prevalent in this literature. Firms with presidential ties enjoyed greater abnormal returns around the 2016 election. Since Trump’s inauguration, connected firms had better performance, received more government contracts, and were less subject to unfavorable regulatory actions. We rule out a number of confounding factors, including industry designation, sensitivity to Republican platforms, campaign finance, and lobbying expenditures.
Original languageEnglish
JournalJournal of Financial Economics
Issue numberIn Press
DOIs
Publication statusPublished - 2020

Corresponding author email

t.b.child@ceibs.edu

Keywords

  • Donald Trump
  • Event study
  • Firm performance
  • Political connections

Indexed by

  • FT
  • ABDC-A*
  • Scopus
  • SSCI

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