TY - CONF

T1 - The Corporate Value of the Old School Tie: Political and Educational Networks in the UK

AU - Acker, Daniella

AU - Orujov, Ayan

AU - Simpson, Helen

PY - 2016/3

Y1 - 2016/3

N2 - We provide evidence that political connections formed via a shared educational background between company directors and politicians are valuable both for UK companies, and for connected directors. Share prices of companies more strongly connected to the Conservative party are more responsive to fluctuations in the Conservative party’s opinion-poll lead in the run-up to the 2010 UK General Election. We find political connections are more valuable for companies when based on a closer educational tie, and when they involve a powerful director (CEO), a powerful politician (Cabinet Member), and smaller companies with a higher share of UK sales. Conservative connected directors also receive higher remuneration, suggesting that at least part of the value to companies accrues to directors with political contacts.

AB - We provide evidence that political connections formed via a shared educational background between company directors and politicians are valuable both for UK companies, and for connected directors. Share prices of companies more strongly connected to the Conservative party are more responsive to fluctuations in the Conservative party’s opinion-poll lead in the run-up to the 2010 UK General Election. We find political connections are more valuable for companies when based on a closer educational tie, and when they involve a powerful director (CEO), a powerful politician (Cabinet Member), and smaller companies with a higher share of UK sales. Conservative connected directors also receive higher remuneration, suggesting that at least part of the value to companies accrues to directors with political contacts.

M3 - Paper

T2 - Royal Economic Society Conference

Y2 - 21 March 2016 through 23 March 2016

ER -