Political polarization and corporate political advocacy
Political polarization and corporate political advocacy
This paper examines the motivations and financial consequences of corporate political advocacy by examining the pause and subsequent resumption of corporate political donations following the US Capitol riots. Firms operating in a politically polarized environment were more likely to make these announcements, regardless of firm-level political risks. The announcement returns are negative (positive) for firms exposed to high polarization and political risks (high polarization and low political risks). Store footfalls, sales, gross margins, and profitability increase for both these groups. However, firms facing high polarization and political risks are more likely to resume PAC donations within a year of the Capitol riots.
Firm value, Political polarization, Political strategy
Homroy, Swarnodeep
bf9526ca-76e9-4d1f-8b8e-0be867b684f1
Gangopadhyay, Shubhashis
97f05806-e08f-4e93-85e5-a7791cddd08c
16 February 2026
Homroy, Swarnodeep
bf9526ca-76e9-4d1f-8b8e-0be867b684f1
Gangopadhyay, Shubhashis
97f05806-e08f-4e93-85e5-a7791cddd08c
Homroy, Swarnodeep and Gangopadhyay, Shubhashis
(2026)
Political polarization and corporate political advocacy.
Journal of International Money and Finance, 163, [103539].
(doi:10.1016/j.jimonfin.2026.103539).
Abstract
This paper examines the motivations and financial consequences of corporate political advocacy by examining the pause and subsequent resumption of corporate political donations following the US Capitol riots. Firms operating in a politically polarized environment were more likely to make these announcements, regardless of firm-level political risks. The announcement returns are negative (positive) for firms exposed to high polarization and political risks (high polarization and low political risks). Store footfalls, sales, gross margins, and profitability increase for both these groups. However, firms facing high polarization and political risks are more likely to resume PAC donations within a year of the Capitol riots.
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e-pub ahead of print date: 12 February 2026
Published date: 16 February 2026
Keywords:
Firm value, Political polarization, Political strategy
Identifiers
Local EPrints ID: 510163
URI: http://eprints.soton.ac.uk/id/eprint/510163
ISSN: 0261-5606
PURE UUID: d887d0dc-1ca0-4563-a562-c2a0a6e8c4a5
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Date deposited: 19 Mar 2026 17:37
Last modified: 20 Mar 2026 03:13
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Contributors
Author:
Swarnodeep Homroy
Author:
Shubhashis Gangopadhyay
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