The value of international political connections: Evidence from Trump's 2016 surprise election

Fink, Alexander; Stahl, Jörg R.

doi:10.1016/j.jebo.2020.03.034

Cited by 8 publications

(4 citation statements)

References 25 publications

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“…The average effect of being connected to the Democrat or Republican parties is not statistically different from zero. Our findings contradict prior evidence that uses value-based measures for Republican candidates during the Bush and Trump eras (Fink and Stahl, 2020;Goldman, Rocholl and So, 2009;Wagner, Zeckhauser and Ziegler, 2018), as they find a positive alignment effect for Republican directors. Interestingly, our findings are in line with studies examining political connections around regime changes (Siegel, 2007;Talmud, 1992Talmud, , 1999Talmud and Mesch, 1997).…”

Section: Resultscontrasting

confidence: 99%

“…Interestingly, in line with Siegel (2007), we find that following a political regime change, connections to the Democrat party turn into a liability during Trump's presidency. Third, several studies find positive effects among board members with ties to the Republican party following his appointment (Fink and Stahl, 2020; Wagner, Zeckhauser and Ziegler, 2018). These studies use an event study design and find that Republican connections are valuable resources to the firm.…”

Section: Introductionmentioning

confidence: 99%

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Political Connections and Shareholder Support

Blomkvist,

Liljeblom,

Löflund

et al. 2023

British J of Management

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We study investors’ preferences for corporate political connections in the United States using a novel measure: shareholder votes given to individual directors. We find that, after fully accounting for all firm‐year specific information and a wide range of director characteristics, politically connected directors on average do not obtain significantly greater shareholder support. During our sample period (2010–2020), we observe a diminishing popularity of politically connected directors. Political alignment to the incumbent government matters in the sense that Democrat directors are viewed as valuable to shareholders during the Obama administration. However, during Donald Trump's presidency, a Democrat party affiliation instead turned into a liability. We also find that shareholders have a stronger preference for politically connected directors in heavily regulated industries, suggesting that board members can alleviate regulatory risk. Our study has implications for director selection and the role of political connections in shaping corporate governance practices.

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Section: Resultscontrasting

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Political Connections and Shareholder Support

Blomkvist,

Liljeblom,

Löflund

et al. 2023

British J of Management

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show abstract

“…Our analysis of the effects of state political ties on the global pricing of foreign equity returns complements the strand of the literature which has documented the role of domestic political connections on firm value. 5 More closely related to our work are those who focus on cross-border relations such as Fink and Stahl (2020) who show that foreign firm campaign contributions to US elections help them obtain higher abnormal returns.…”

Section: Introductionmentioning

confidence: 83%

Global Political Ties and the Global Financial Cycle

Ambrocio,

Hasan,

2023

SSRN Journal

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“…Solji and Tham (2017) find that foreign political connections add to firm value as they help firms enter foreign markets. Fink and Stahl (2020) show that foreign firms' campaign contributions during the 2016 US presidential election are associated with higher equity returns. Aleksanyan et al (2021) find that political state visits improve cross-border mergers and acquisitions outcomes.…”

Section: Introductionmentioning

confidence: 97%