Date of Award
5-2020
Degree Type
Report
Degree Name
Master of Science (MS)
Department
Economics and Finance
Committee Chair(s)
Paul Fjeldsted
Committee
Paul Fjeldsted
Committee
Ben Blau
Committee
Lucas Rentschler
Abstract
Shortly after winning the 2016 Presidential Election, Donald Trump began announcing his Cabinet nominations. I examine cumulative abnormal returns (CARs) for firms with political connections to Cabinet and some non-Cabinet level appointments. Nominee and stock characteristics are aggregated, and I find positive and significant CARs surrounding the announcement dates. Additionally, the traits of being a Cabinet nominee, being a board member, and having a narrow confirmation margin all significantly explain the CARs for various event windows and subgroups. The annualized CARs around the announcement date for these firms are often greater than 100% in excess of the market, providing strong evidence that political connections are highly sought after and rewarded by the market.
Recommended Citation
Bacon, Kennon, "Political Connections and Abnormal Stock Returns: An Analysis of the Trump Nominations" (2020). All Graduate Plan B and other Reports, Spring 1920 to Spring 2023. 1445.
https://digitalcommons.usu.edu/gradreports/1445
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