Lobbying as a hedge on political risk : when size matters
Name
1191221820-MIT.pdf
Size
391.78 KB
Format
Adobe PDF
Checksum (MD5)
3a4ad59084c8bf52bb63d4260855fc44
Author(s)
Jaffard, Pierre(Pierre Jacques)
Advisor(s)
Adrien Verdelhan.
Date Issued
2020
Publisher
Massachusetts Institute of Technology
Abstract
I develop a three-period asset pricing model with heterogeneity in firms size and a government that introduces a policy distortion. I find that large firms can better hedge the political uncertainty associated with this policy change through lobbying, which leads them to earn lower expected returns. I provide two strands of empirical evidence consistent with the model predictions. The first one looks at the behavior of a blue versus red industries around the unexpected results of the 2016 US Presidential election. The second one uses portfolio sorting and double-sorting to reach consistent conclusions.
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, May, 2020
Cataloged from the official PDF of thesis.
Includes bibliographical references (pages 51-53).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
Terms of Use
MIT theses may be protected by copyright. Please reuse MIT thesis content according to the MIT Libraries Permissions Policy, which is available through the URL provided.
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