CEF.UP – FIN Seminar/Webinar

Thursday – April 20^th, 2023 at 1:00 p.m. | Room 305| Online

“Political connections and shareholder support“

Anders Löflund  – Hanken School of Economics (joint work with Magnus Blomkvist, Eva Liljeblom and Etienne Redor)

Abstract:

“We study investors’ preferences for corporate political connections in the U.S. 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, that politically connected directors on average do not obtain significantly greater shareholder support. However, during the time-period 2010 to 2016 the board elections echo the nationwide political climate, as directors with ties to the Democratic party receive more shareholder votes. We also find that shareholders have a stronger preference for politically connected directors in heavily regulated industries, suggesting that board members closer to the incumbent government can alleviate regulatory risk. Our study has implications for director selection and the role of political connections in shaping corporate governance practices.”