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Sudden Deaths: Taking Stock of Geographic Ties

Published online by Cambridge University Press:  01 June 2009

Mara Faccio  and
David C. Parsley
Mara Faccio
Affiliation:
Purdue University, Krannert School of Management, 403 W. State St., West Lafayette, IN 47907. [email protected]
David C. Parsley
Affiliation:
Vanderbilt University, Owen Graduate School of Management, 401 21st Ave. S., Nashville TN 37203. [email protected]
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Abstract

Analysis of a worldwide sample of sudden deaths of politicians reveals a market-adjusted 1.7% decline in the value of companies headquartered in the politician's hometown. The decline in value is followed by a drop in the rate of growth in sales and access to credit. Our results are particularly pronounced for family firms, firms with high growth prospects, firms in industries over which the politician has jurisdiction, and firms headquartered in highly corrupt countries.

Type
Research Articles
Information
Journal of Financial and Quantitative Analysis , Volume 44 , Issue 3 , June 2009 , pp. 683 - 718
Copyright
Copyright © Michael G. Foster School of Business, University of Washington 2009

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