Open access
Date
2012-08Type
- Working Paper
ETH Bibliography
yes
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Abstract
We analyze stock market reactions to announcements of political appointments from the private sector and corporate appointments of former government officials. Using unique data on corporate affiliations and announcements of all Senate-confirmed U.S. Defense Department appointees of six administrations, we find positive abnormal returns for political appointments. These estimates are not driven by important observations, volatile stocks or industry-wide developments. Placebo events yield no effects. Effects are larger for top government positions and less anticipated announcements. We also find positive abnormal returns for corporate appointments. Our results suggest that conflicts of interest matter also in a country with strong institutions. Show more
Permanent link
https://doi.org/10.3929/ethz-a-007362333Publication status
publishedJournal / series
KOF Working PapersVolume
Publisher
KOF Swiss Economic Institute, ETH ZurichSubject
Revolving door; POLITICAL INFLUENCE (INTERNAL POLITICS); POLITISCHE EINFLUSSNAHME (INNENPOLITIK); Stock market; Event study; Political appointees; FINANCIAL MARKETS; Conflict of interest; GEWINN + VERLUST; FINANZMÄRKTE; PROFIT + LOSSOrganisational unit
03716 - Sturm, Jan-Egbert / Sturm, Jan-Egbert
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
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ETH Bibliography
yes
Altmetrics