Executives in Politics

Abstract

We document that the share of corporate executives in federal elected office increased from 13.3% in 1980 to 22.6% in 2018 and find evidence suggesting that executives enter politics to advance their firms’ interests. First, firms make substantial political contributions to their former executives. Second, executives’ electoral wins and legislation passage are associated with positive stock returns for their firms. Third, executives are more likely to join congressional committees overseeing their firms’ industries. Fourth, executives accumulate a pro-business voting record. Finally, executives are more likely to seek political office when their industries are hit by competitive shocks.