The DOI matches its Crossref record; 16 of the 16 references it cites were found in a registry or an index.
The Jeffords Effect
Abstract
In May 2001, Senator James Jeffords left the Republican Party and tipped control of the U.S. Senate to the Democrats. This paper uses the surprise event to demonstrate what I term the “Jeffords effect”: changes in the political landscape have large effects on the market value of firms. I use a firm’s soft‐money donations to the national parties as the measure of how the firm aligns itself politically. In this event study, a firm lost .8 percent of market capitalization the week of Jeffords’s switch for every $250,000 it gave to the Republicans in the previous election cycle. On the basis of the point estimates, the stock price gain associated with Democratic donations is smaller than the loss associated with Republican donations, but the estimates are consistent with the effects being equal and opposite. The results withstand several robustness checks, and the effects appear to persist over time.
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The Econometrics of Financial Markets
Campbell, J. Y., Lo, A. W., & MacKinlay, A. C. (2012) · Princeton University Press eBooks · doi:10.2307/j.ctt7skm5 · Cited by 5,875
Estimating the Value of Political Connections
Fisman, R. (2001) · American Economic Review · doi:10.1257/aer.91.4.1095 · Cited by 2,968
(2013) · American Economic Review · doi:10.1257/aer.103.7.i · Cited by 2,733
Grossman, G. M., & Helpman, E. (2002) · Journal of Institutional and Theoretical Economics · doi:10.1628/0932456022975231 · Cited by 1,558
Why is There so Little Money in U.S. Politics?
Ansolabehere, S., de Figueiredo, J. M., & Snyder, J. M. (2003) · Journal of Economic Perspectives · doi:10.1257/089533003321164976 · Cited by 1,281
Buying Time: Moneyed Interests and the Mobilization of Bias in Congressional Committees
Hall, R. L., & Wayman, F. W. (1990) · American Political Science Review · doi:10.2307/1962767 · Cited by 932
A Dead Senator Tells No Lies: Seniority and the Distribution of Federal Benefits
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PACs and the Congressional Supermarket: The Currency is Complex
Grenzke, J. M. (1989) · American Journal of Political Science · doi:10.2307/2111251 · Cited by 285
Legislative Leviathan: Party Government in the House
(2007) · Legislative Leviathan · doi:10.1017/cbo9780511810060.001 · Cited by 254
Cited by
Do Politically Connected Boards Affect Firm Value?
Goldman, E., Rocholl, J., & So, J. (2009) · Review of Financial Studies · doi:10.1093/rfs/hhn088 · Cited by 1,297
Politically Connected Boards of Directors and The Allocation of Procurement Contracts
Goldman, E., Rocholl, J., & So, J. (2013) · Review of Finance · doi:10.1093/rof/rfs039 · Cited by 920
Corporate Political Contributions and Stock Returns
COOPER, M. J., GULEN, H., & OVTCHINNIKOV, A. V. (2010) · The Journal of Finance · doi:10.1111/j.1540-6261.2009.01548.x · Cited by 870
The value of connections in turbulent times: Evidence from the United States
Acemoglu, D., Johnson, S., Kermani, A., Kwak, J., & Mitton, T. (2016) · Journal of Financial Economics · doi:10.1016/j.jfineco.2015.10.001 · Cited by 615
POLITICIANS AT WORK: THE PRIVATE RETURNS AND SOCIAL COSTS OF POLITICAL CONNECTIONS
Cingano, F., & Pinotti, P. (2013) · Journal of the European Economic Association · doi:10.1111/jeea.12001 · Cited by 561
Metadata
- Authors
- Jayachandran, S.
- Venue
- The Journal of Law and Economics
- Publisher
- University of Chicago Press
- Published
- 2006-10
- Volume
- 49
- Issue
- 2
- Pages
- 397-425
- ISSN
- 0022-2186 (ISSN-L)
- 1537-5285
- OpenAlex
- W3121177697
- Cited by
- 316
- References
- 16
- FWCI
- 31.24
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
