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Sovereign wealth fund investments and the US political process

Author

Listed:
  • Paul Calluzzo

    (Queen’s University)

  • G Nathan Dong

    (Columbia University)

  • David Godsell

    (University of Illinois at Urbana-Champaign)

Abstract

We examine US firm-level campaign finance contributions preceding and subsequent to equity investment by a sovereign wealth fund (SWF). Our empirical results suggest that SWFs are attracted to firms engaged in US campaign finance and that firm campaign finance contributions increase after SWF investment. SWF attraction to campaign finance firms increases (1) after an exogenous legal shock that liberalized corporate campaign finance activities, and (2) in a subset of industries vulnerable to recent legislation capable of inhibiting or expunging foreign investment. We provide some of the first evidence consistent with political motives for SWF investment in the United States.

Suggested Citation

  • Paul Calluzzo & G Nathan Dong & David Godsell, 2017. "Sovereign wealth fund investments and the US political process," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(2), pages 222-243, February.
    • Handle: RePEc:pal:jintbs:v:48:y:2017:i:2:d:10.1057_s41267-016-0057-5
    DOI: 10.1057/s41267-016-0057-5
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    3. Peng Liu & Nathan Mauck & S. McKay Price, 2020. "Are Government Owned Investment Funds Created Equal? Evidence from Sovereign Wealth Fund Real Estate Acquisitions," The Journal of Real Estate Finance and Economics, Springer, vol. 61(4), pages 698-729, November.
    4. Pedro Makhoul & Aldo Musacchio & Sergio Lazzarini, 2020. "Going the Distance: The Foreign Investment Strategies of Sovereign Wealth Funds," Strategy Science, INFORMS, vol. 5(1), pages 39-54, March.
    5. Douglas Cumming & Igor Filatotchev & April Knill & David Mitchell Reeb & Lemma Senbet, 2017. "Law, finance, and the international mobility of corporate governance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(2), pages 123-147, February.
    6. Megginson, William L. & Gao, Xuechen, 2020. "The state of research on sovereign wealth funds," Global Finance Journal, Elsevier, vol. 44(C).
    7. Boland, Matthew & Godsell, David, 2021. "Bureaucratic discretion and contracting outcomes," Accounting, Organizations and Society, Elsevier, vol. 88(C).
    8. Pei Sun & Jonathan P. Doh & Tazeeb Rajwani & Donald Siegel, 2021. "Navigating cross-border institutional complexity: A review and assessment of multinational nonmarket strategy research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(9), pages 1818-1853, December.
    9. William L. Megginson & Asif I. Malik & Xin Yue Zhou, 2023. "Sovereign wealth funds in the post-pandemic era," Journal of International Business Policy, Palgrave Macmillan, vol. 6(3), pages 253-275, September.
    10. K.S.Reddy, 2019. "Pot the ball? Sovereign wealth funds’ outward FDI in times of global financial market turbulence: A yield institutions-based view," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 19(4), pages 129-139.
    11. Grira, Jocelyn, 2020. "Back to government ownership: The Sovereign Wealth Funds phenomenon," Finance Research Letters, Elsevier, vol. 34(C).
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