This paper examines how companies connected to Donald Trump responded to the 2020 and 2024 U.S. presidential elections. Using an event study design, I compare the cumulative abnormal returns of Trump-connected firms and similar firms without observable political ties. The results show that the 2020 election did not generate a clear difference between the two groups, partly because the election period overlapped with major COVID-19 vaccine news and broader market recovery. In contrast, during the 2024 election, firms connected to Trump experienced stronger abnormal returns, especially within the ten trading days after the election. The data also suggest that some of the market reaction appeared before the official election result was announced, implying that investors had already begun adjusting expectations based on polling information and previous experience with Trump's first term. Overall, the findings suggest that the value of political connections changes with political uncertainty and investor expectations rather than remaining constant across different political periods.
Ge Ou (Mon,) studied this question.
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