Journal Articles

Do Politically Connected Boards Affect Firm Value?

2009, Review of Financial Studies

Eitan Goldman, Jorg Rocholl, J. So


This paper explores whether political connections are important in the United States. The paper uses an original hand-collected data set on the political connections of board members of S&P 500 companies to sort companies into those connected to the Republican Party and those connected to the Democratic Party.  The analysis shows a positive abnormal stock return following the announcement of the nomination of a politically connected individual to the board. The paper also analyzes the stock price response to the Republican win of the 2000 presidential election and finds that companies connected to the Republican Party increase in value, and companies connected to the Democratic Party decrease in value.


Goldman, E., J. Rocholl, and J. So (2009), “Do Politically Connected Boards Affect Firm Value?,” Review of Financial Studies, Vol. 22, No. 6, June, pp. 2331-2360. 

Kelley School of Business

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