Analysis reveals that lobbying efforts influenced stock prices in firms affected by U.S. trade policy changes, suggesting market sensitivity to trade agreement dynamics.
We provide systematic evidence that lobbying by firms on trade agreements matters for their stock prices. We leverage a unique shock to U.S. trade policy -- the unexpected victory of Donald Trump in the 2016 U.S. presidential election, and the de facto U.S. withdrawal from the Trans-Pacific Partnership (TPP). We find that stocks of companies that advocated for TPP underperformed, experiencing a reduction in share prices by −1.68%. Further, firms whose lobbying efforts were prominently covered in online news media and those lobbying on provisions of particular interest to the U.S. faced more pronounced losses.
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Hennicke et al. (2025) studied this question.
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