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Do Stock Returns Vary With Campaign Contributions? Bush Vs. Gore: The Florida Recount

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  • JOHN J. SHON

Abstract

I examine the relation between campaign contributions and stock returns during the Florida recount period of the 2000 presidential elections. Using the full population of publicly traded firms, I find an economically significant positive (negative) relation between pre‐election campaign contributions to Bush (Gore) and stock returns during the 37‐day election recount period. This relation exists for both the level and partisanship of contributions, and exists incrementally at both the firm and industry levels. These relations are robust to several different specifications, including alternative event windows that exclude the potentially confounding House/Senate races. The firm‐level analysis is consistent with contributions being influence‐motivated.

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  • John J. Shon, 2010. "Do Stock Returns Vary With Campaign Contributions? Bush Vs. Gore: The Florida Recount," Economics and Politics, Wiley Blackwell, vol. 22(3), pages 257-281, November.
    • Handle: RePEc:bla:ecopol:v:22:y:2010:i:3:p:257-281
    DOI: 10.1111/j.1468-0343.2009.00359.x
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    Cited by:

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    2. Mariana G. Davi & Marcelo S. Portugal, 2020. "Politics and finance: a study on the impact of campaign donations on Brazilian firms," Empirical Economics, Springer, vol. 58(3), pages 1057-1105, March.
    3. Deari Fitim & Koku Paul Sergius, 2024. "Do Local Political Elections Affect Daily Stock Returns? Evidence from the Republic of North Macedonia's MBI10 Index," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 34(1), pages 98-116, March.
    4. Fatma Ben Moussa & Mariem Talbi, 2019. "Stock Market Reaction to Terrorist Attacks and Political Uncertainty: Empirical Evidence from the Tunisian Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 48-64.
    5. Aggarwal Rajesh K. & Meschke Felix & Wang Tracy Yue, 2012. "Corporate Political Donations: Investment or Agency?," Business and Politics, De Gruyter, vol. 14(1), pages 1-40, April.
    6. Correia, Maria M., 2014. "Political connections and SEC enforcement," Journal of Accounting and Economics, Elsevier, vol. 57(2), pages 241-262.

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