Frischseminar: Colin Green

Incorporated in Westminster: Channels and Returns to Political Connection in the United Kingdom

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In 2002, an amendment to UK parliamentary regulations removed

restrictions on the participation of members of parliament (MPs) in

parliamentary proceedings related to their corporate interests. Using

this amendment as a quasi-natural experiment, we demonstrate higher

equity returns for FTSE 350 firms connected to an MP due to the increase

in the value of political access, net of the expertise of the

politician. Post-amendment, MPs with corporate connections are more

likely to be members of parliamentary select and joint committees and

attend more committee meetings. Firms are more likely to appoint MPs and

reduce political donations. The benefits of higher political access are

greater for firms with family ownership and lower accounting transparency.

Publisert 25. aug. 2020 09:22 - Sist endret 11. des. 2020 10:15