Presidential power and stock returns
研究发现，在总统权力较弱的时期（如政党更替前两年或支持率低时），政治关联对股票收益的正面影响显著减弱，且小公司受影响更大。
Abstract Recent studies highlight the positive effect of political connections on firm performance and stock returns. This paper shows that the positive effect of political connections on stock returns becomes substantially weaker in the weak presidency period, defined as the last 2 years before presidential party change or period of low job approval ratings. We consider two hypotheses—political interconnectedness and political risk—and find that both hypotheses are important in explaining the weak presidency effect on stock returns, political benefits, and research and development and capital expenditure. There is a trade‐off between direct political investment and passive political alignment. Firms with direct political investment tend to hedge political risk so that they can run their real side investment on their own schedule. Consistent with this story, we find that the weak presidency effect is more pronounced for small firms that lack the resources for direct political investment.