Corporate political activism and information transfers

Arbeitspapier

Prior research suggests that: (1) politically active firms have an information advantage over firms that do not engage in the political process, but also that (2) politically active firms are more likely to disclose policy-related information. We examine whether there are externalities associated with the processing of political information by politically active firms. We study this question in the setting of intra-industry information transfers around earnings announcements. Measuring firms' political activism using campaign contributions, we find stronger intra-industry information transfers from politically active firms to their industry peers. These information transfers are stronger when there is more discussion during conference calls of political topics that have industry or market-wide implications. Similarly, these information transfers are also stronger when there is greater political uncertainty. Our paper highlights an important information externality related to politically active firms' disclosures and improves our understanding of how politically active firms affect their industries' information environment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: New Working Paper Series ; No. 334

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Accounting ; Accounting and Auditing: Government Policy and Regulation
• Subject: Information transfer ; earnings announcements ; political economy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Christensen, Dane M. ; Jin, Hengda ; Lee, Joshua A. ; Sridharan, Suhas A. ; Wellman, Laura A.
• Event: Veröffentlichung
• (who): University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State
• (where): Chicago, IL
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/278752
• Last update: 10.03.2025, 11:42 AM CET