Business

Basis point

Presidential election

Value (mathematics)

Government (linguistics)

Politics

Machine learning

Philosophy

Interest rate

Political science

Psychology

Economics

Exploit

Presidential system

Victory

Surprise

Computer science

Linguistics

Monetary economics

Computer security

Social psychology

Journal of Financial Economics

We exploit Donald Trump's nonpolitical background and surprise election victory to identify the value of sudden presidential ties among S&P 500 firms. In our setting firms did not choose to become politically connected, so we identify treatment effects comparatively free of selection bias prevalent in this literature. Firms with presidential ties enjoyed greater abnormal returns around the 2016 election. Since Trump's inauguration, connected firms had better performance, received more government contracts, and were less subject to unfavorable regulatory actions. We rule out a number of confounding factors, including industry designation, sensitivity to Republican platforms, campaign finance, and lobbying expenditures.

Surprise election for Trump connections