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Campaign Contributions over CEOs’ Careers

Author

Listed:
  • Adam R. Fremeth

    () (Richard Ivey School of Business, University of Western Ontario, London, ON)

  • Brian Kelleher Richter

    () (Richard Ivey School of Business, University of Western Ontario)

  • Brandon Schaufele

    () (Department of Economics, University of Ottawa, Ottawa, ON)

Abstract

Individuals dominate money in politics, accounting for over 90% of campaign contributions, but studies of individuals’ giving are scarce. We show that individuals increase their personal contributions dramatically when they assume leadership roles at organizations such as labor unions, non-profits, and firms. Using a newly constructed dataset that focuses on personal contributions, we exploit variation in the leadership status of all 2,198 individuals who were S&P 500 CEOs at any point between 1991 and 2008 to identify a $4,000 jump in personal political giving when individuals become CEOs. Despite giving more money to more candidates, more political action committees (PACs), and more parties, active CEOs’ partisan orientations remain largely unchanged. Falsification tests of an underlying identification assumption demonstrate that these patterns hold whether an individual is promoted to CEO internally or appointed externally. While some fraction of CEOs’ contributions can be attributed to long-standing preferences, willingness, and ability to contribute, the striking change in behavior we identify cannot be explained by these factors alone.

Suggested Citation

  • Adam R. Fremeth & Brian Kelleher Richter & Brandon Schaufele, 2012. "Campaign Contributions over CEOs’ Careers," Working Papers 1203E, University of Ottawa, Department of Economics.
  • Handle: RePEc:ott:wpaper:1203e
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    References listed on IDEAS

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    1. Meer, Jonathan & Rosen, Harvey S., 2011. "The ABCs of charitable solicitation," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 363-371, June.
    2. Eric Guthey & Brad Jackson, 2005. "CEO Portraits and the Authenticity Paradox," Journal of Management Studies, Wiley Blackwell, vol. 42(5), pages 1057-1082, July.
    3. Silberman, Jonathan I & Durden, Garey C, 1976. "Determining Legislative Preferences on the Minimum Wage: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 317-329, April.
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    5. Milyo, Jeffrey & Primo, David & Groseclose, Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, Cambridge University Press, vol. 2(01), pages 75-88, April.
    6. Joulfaian, David & Marlow, Michael L, 1991. "Incentives and Political Contributions," Public Choice, Springer, vol. 69(3), pages 351-355, March.
    7. Steven N. Kaplan & Bernadette Minton, 2006. "How has CEO Turnover Changed? Increasingly Performance Sensitive Boards and Increasingly Uneasy CEOs," NBER Working Papers 12465, National Bureau of Economic Research, Inc.
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    11. repec:cup:apsrev:v:89:y:1995:i:03:p:566-581_09 is not listed on IDEAS
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    Cited by:

    1. Niebler, Sarah & Urban, Carly, 2017. "Does negative advertising affect giving behavior? Evidence from campaign contributions," Journal of Public Economics, Elsevier, vol. 146(C), pages 15-26.

    More about this item

    Keywords

    Campaign Contributions; CEOs; Leaders; Personnel Economics; PACs;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H89 - Public Economics - - Miscellaneous Issues - - - Other
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • M59 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Other

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