Self-funding of Political Campaigns
In: HEC Paris Research Paper No. FIN-2016-1165
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In: HEC Paris Research Paper No. FIN-2016-1165
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Working paper
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Working paper
In: Swiss Finance Institute Research Paper No. 21-23
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We show that political investments, defined as political contributions and lobbying expenditure, have a large impact on the firm's credit risk. Firms that invest in politics, on average, have significantly and economically lower CDS spreads. We address endogeneity issues by utilizing a quasi-natural experiment and an instrumental variable approach to obtain exogenous variations in political investments, and find that political investments reduce the price of credit risk. The reduction in spreads is greater for firms that are more sensitive to government policies. In addition, and consistent with agency conflicts, political investments by weakly governed firms are relatively less effective at reducing the market price of credit risk.
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In: HEC Paris Research Paper No. FIN-2014-1053
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Working paper
In: HEC Paris Research Paper No FIN-2021-1443
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In: HEC Paris Research Paper No. FIN-2017-1222
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Working paper
In: Risk Management Research Report, Spring 2010
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