Our findings demonstrate that in an era of heightened polarization, corporate-political alignment represents a significant economic component of stock returns. This provides novel evidence on how electoral uncertainty transmits through financial markets 4/4 Link: papers.ssrn.com/sol3/papers....
We analyzed 71 firms using PolyMarket & PredictIt data alongside OpenSecrets contribution records. Our local projection framework revealed a clear "dose-response" relationship - stronger partisan ties = larger stock price effects when electoral odds shifted 3/4
When Trump's election probability increased by 1 percentage point, Republican-affiliated firms outperformed Democratic-leaning counterparts by ~0.3%. Effects emerged within hours and persisted for weeks, suggesting markets efficiently price political connections 2/4
Our new paper with Emrehan Aktuğ examines how real-time changes in 2024 presidential election odds affected stock valuations based on firms' partisan affiliations. We used high-frequency data from prediction markets and corporate political contribution records 🧵 1/4 #econsky #econ
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