Political polarization and corporate political advocacy
利用2021年美国国会山骚乱事件，研究企业暂停和恢复政治捐赠的动机与财务后果，发现政治极化环境下的企业更可能做出此类决策，且市场反应因企业面临的政治风险水平而异。
• We use Capitol Riots of January 2021 to examine the value effects of corporate political advocacy. • Firms operating in a politically polarized environment and with Democrat-leaning employees were more likely to make these announcements, irrespective of firm-level political risks. • The average announcement returns are negative for firms exposed to high polarization and political risks but positive for firms exposed to high polarization and low political risks. • Customer visits to stores, sales turnover, gross margins and profitability increase following announcements for both these groups. • Firms facing high polarization and political risks are more likely to resume PAC donations within a year of the Capitol riots. This paper examines the motivations and financial consequences of corporate political advocacy by examining the pause and subsequent resumption of corporate political donations following the US Capitol riots. Firms operating in a politically polarized environment were more likely to make these announcements, regardless of firm-level political risks. The announcement returns are negative (positive) for firms exposed to high polarization and political risks (high polarization and low political risks). Store footfalls, sales, gross margins, and profitability increase for both these groups. However, firms facing high polarization and political risks are more likely to resume PAC donations within a year of the Capitol riots.