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strategy
by leon on November 7, 2006

The study Corporate Political Contributions and Stock Returns found that the share price performance of companies that contributed to the largest number of congressional candidates was better than those of other companies. The bigger the spread of candidates, the better the returns.
"If a firm increases the number of supported candidates by about 96 candidates, it will experience an increase in annual returns of approximately six per cent,'' the researchers said.
They cannot say exactly how the contributions increase the bottom line. But they make the point that potential ways could include favourable tax treatment or credits, government contracts, imposing tariffs or penalties on competitors and favourable regulatory requirements.
"Given that out study involves literally hundreds of thousands of individual contributions, it is not practical to trace through all the possible legislation that may affect firm returns,'' they say.
Still, one could only imagine.
Significantly, the study finds that the defence, tobacco, aircraft, automobile and oil industries tend to hold the largest portfolios of supported candidates.
And although Republicans receive more contributions, the contribution effect is stronger for firm contributions to Democrats.
Permalink: Campaign contributions and share price
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Shares of companies that make political contributions do much better than those of other companies. A study has found that the bigger the spread of candidates, the better the returns, perhaps by up to 6 per cent!. According to the study, defence, tobac...
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news.fatpitchfinancials.com
Shares of companies that make political contributions do much better than those of other companies. A study has found that the bigger the spread of candidates, the better the returns, perhaps by up to 6 per cent!. According to the study, defence, tobac...
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Shares of companies that make political contributions do much better than those of other companies. A study has found that the bigger the spread of candidates, the better the returns, perhaps by up to 6 per cent!. According to the study, defence, tobac...
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IndianPad
Sox First: Campaign contributions and share price posted at IndianPad.com
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