Table 1 Relationship between corporate...

Table 1

Relationship between corporate contributions and stock returns.

	One-day window
			Abnormal returns
Variables	Abnormal returns (1)	Raw returns (2)	Firm controls (3)	Intensive margins (4)	Regulated industry (5)	Industry donations (6)	Abnormal dummy (7)	One-week window (8)
Panel A: 2009–2010 data
Donations to Democrats/$100,000	0.00195	0.00197	0.00194	0.00180	0.00193	0.00127	0.09766	0.00689
	(0.00054)	(0.00053)	(0.00055)	(0.00054)	(0.00055)	(0.00058)	(0.02576)	(0.00182)
Donations to Republicans/$100,000	−0.00148	−0.00140	−0.00159	−0.00150	−0.00157	−0.00106	−0.07738	−0.00702
	(0.00054)	(0.00052)	(0.00056)	(0.00058)	(0.00056)	(0.00052)	(0.02533)	(0.00190)
Regulated industry dummy					0.00043 (0.00181)
Industry donations to Democrats/$100,000						0.00030 (0.00016)
Industry donations to Republicans/$100,000						−0.00028 (0.00013)
Observations	500	500	496	292	496	496	496	496
Panel B: 2007–2008 data
Donations to Democrats/$100,000	0.00207	0.00200	0.00190	0.00191	0.00188	0.00150	0.10470	0.00797
	(0.00083)	(0.00082)	(0.00087)	(0.00083)	(0.00085)	(0.00082)	(0.03785)	(0.00273)
Donations to Republicans/$100,000	−0.00149	−0.00133	−0.00144	−0.00149	−0.00142	−0.00106	−0.07891	−0.00758
	(0.00080)	(0.00078)	(0.00082)	(0.00079)	(0.00081)	(0.00077)	(0.03624)	(0.00250)
Regulated industry dummy					0.00051 (0.00176)
Industry donations to Democrats/$100,000						0.00023 (0.00020)
Industry donations to Republicans/$100,000						−0.00021 (0.00017)
Observations	500	500	496	284	496	496	496	496
Firm-specific controls	No	No	Yes	Yes	Yes	Yes	Yes	Yes

	One-day window
			Abnormal returns
Variables	Abnormal returns (1)	Raw returns (2)	Firm controls (3)	Intensive margins (4)	Regulated industry (5)	Industry donations (6)	Abnormal dummy (7)	One-week window (8)
Panel A: 2009–2010 data
Donations to Democrats/$100,000	0.00195	0.00197	0.00194	0.00180	0.00193	0.00127	0.09766	0.00689
	(0.00054)	(0.00053)	(0.00055)	(0.00054)	(0.00055)	(0.00058)	(0.02576)	(0.00182)
Donations to Republicans/$100,000	−0.00148	−0.00140	−0.00159	−0.00150	−0.00157	−0.00106	−0.07738	−0.00702
	(0.00054)	(0.00052)	(0.00056)	(0.00058)	(0.00056)	(0.00052)	(0.02533)	(0.00190)
Regulated industry dummy					0.00043 (0.00181)
Industry donations to Democrats/$100,000						0.00030 (0.00016)
Industry donations to Republicans/$100,000						−0.00028 (0.00013)
Observations	500	500	496	292	496	496	496	496
Panel B: 2007–2008 data
Donations to Democrats/$100,000	0.00207	0.00200	0.00190	0.00191	0.00188	0.00150	0.10470	0.00797
	(0.00083)	(0.00082)	(0.00087)	(0.00083)	(0.00085)	(0.00082)	(0.03785)	(0.00273)
Donations to Republicans/$100,000	−0.00149	−0.00133	−0.00144	−0.00149	−0.00142	−0.00106	−0.07891	−0.00758
	(0.00080)	(0.00078)	(0.00082)	(0.00079)	(0.00081)	(0.00077)	(0.03624)	(0.00250)
Regulated industry dummy					0.00051 (0.00176)
Industry donations to Democrats/$100,000						0.00023 (0.00020)
Industry donations to Republicans/$100,000						−0.00021 (0.00017)
Observations	500	500	496	284	496	496	496	496
Firm-specific controls	No	No	Yes	Yes	Yes	Yes	Yes	Yes

Note: Robust standard errors clustered by industry in parentheses. One-day return calculated as of May 2, 2011, the first trading day after Bin Laden’s capture. One-week return calculated as of May 6, 2011. Firm-specific controls are log of total assets (proxy for firm size), fixed-to-total assets ratio (proxy for asset tangibility), total assets-to-total liabilities (proxy for leverage), earnings before interest and taxes-to-total assets (proxy for operating profitability), and sales growth (proxy for growth opportunities). Regulated industries refer to railroad, public utilities, banking, finance, and insurance industries (SIC codes 40, 48, 49, 60, 61, and 63). “Abnormal dummy” is a dummy variable that takes a value of one if abnormal returns were positive.

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