Valuing Changes in Political Networks: Evidence from Campaign Contributions to Close Congressional Elections

Akey, Pat

doi:10.1093/rfs/hhv035

Cited by 287 publications

(75 citation statements)

References 32 publications

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“…5 Akey (2013) presents …ndings that are similar in magnitude to ours, but for congressional elections where "the wedge between …rms connected to a winning politician and …rms connected to a losing politician is 1.7% to 6.8% of …rm equity value. " Goldman, Rocholl, and So (2009) …nd that when George W. Bush won the presidency in 2000 (and Republicans controlled the Senate and the House of Representatives), Republicanlinked …rms gained 3%-5% relative to Democrat-linked …rms, but the links they measure are not exclusive to the executive branch.…”

Section: Introductionsupporting

confidence: 71%

The value of connections in turbulent times: Evidence from the United States

Acemoğlu

Johnson

Kermani

et al. 2016

Journal of Financial Economics

453

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The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for …nancial …rms with which he had a connection. This return was about 6% after the …rst full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected …rms when news broke that Geithner's con…rmation might be derailed by tax issues. Excess returns for connected …rms may re ‡ect the perceived impact of relying on the advice of a small network of …nancial sector executives during a time of acute crisis and heightened policy discretion.

show abstract

Section: Introductionsupporting

confidence: 71%

The value of connections in turbulent times: Evidence from the United States

Acemoğlu

Johnson

Kermani

et al. 2016

Journal of Financial Economics

453

View full text Add to dashboard Cite

show abstract

“…5 Akey (2013) presents findings that are similar in magnitude to ours, but for congressional elections where "the wedge between firms connected to a winning politician and firms connected to a losing politician is 1.7% to 6.8% of firm equity value. " Goldman, Rocholl, and So (2009) find that when George W. Bush won the presidency in 2000 (and Republicans controlled the Senate and the House of Representatives), Republicanlinked firms gained 3%-5% relative to Democrat-linked firms, but the links they measure are not exclusive to the executive branch.…”

Section: Introductionsupporting

confidence: 71%

The Value of Connections in Turbulent Times: Evidence from the United States

Acemoğlu¹,

Johnson²,

Kermani³

et al. 2013

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The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small network of financial sector executives during a time of acute crisis and heightened policy discretion.

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“…The ERA also reports the percentages of votes received by all presidential candidates, allowing us to construct our variable of interest (CLOSE ELECTION i,t ) for country i in year t. We code this variable as 1 if a presidential election occurs in which the margin between the winner's vote percentage and the runner-up's is within the 5% range in country i in year t, and 0 otherwise (Akey (2015), Brogaard, Denes, and Duchin (2016)). Based on this definition, we obtain 11 close presidential election events: Argentina in 2003;Colombia in 1978 andPhilippines in 1992 andPoland in 1995;Uruguay in 1994;the United States in 1976and Venezuela in 1978. We then estimate equation (8) while replacing ELECTION i,t with CLOSE ELECTION i,t , which is an indicator variable equal to 1 if there is 1 close presidential election in country i in year t, and 0 otherwise.…”

Section: Policy Uncertainty and Innovation: Close Presidential Elementioning

confidence: 99%

What Affects Innovation More: Policy or Policy Uncertainty?

Bhattacharya¹,

Hsu²,

Tian³

et al. 2017

J. Financ. Quant. Anal.

413

160

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Motivated by a theoretical model, we examine for 43 countries whether it is policy or policy uncertainty that affects technological innovation more. Innovation activities, measured by patent-based proxies, are not, on average, affected by which policy is in place. Innovation activities, however, drop significantly during times of policy uncertainty measured by national elections. The drop is greater for more influential innovations (citations in the right tail, exploratory rather than exploitative innovations) and for innovation-intensive industries. We use close presidential elections and ethnic fractionalization to address endogeneity concerns. We uncover the mechanism underlying the main result by showing that the number of patenting inventors decreases with policy uncertainty. Political compromise, we conclude, encourages innovation.

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Valuing Changes in Political Networks: Evidence from Campaign Contributions to Close Congressional Elections

Cited by 287 publications

References 32 publications

The value of connections in turbulent times: Evidence from the United States

The value of connections in turbulent times: Evidence from the United States

The Value of Connections in Turbulent Times: Evidence from the United States

What Affects Innovation More: Policy or Policy Uncertainty?

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