Munich Personal RePEc Archive

Sudden Deaths: Taking Stock of Geographic Ties

Faccio, Mara and Parsley, Davie (2007): Sudden Deaths: Taking Stock of Geographic Ties. Forthcoming in: Journal of Financial and Quantitative Analysis

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Abstract

Analysis of a world-wide sample of sudden deaths of politicians reveals a market adjusted 1.7% decline in the value of companies headquartered in the politician’s home town. The decline in value is followed by a drop in the rate of growth in sales and access to credit. Our results are particularly pronounced for family firms, firms with high growth prospects, firms in industries over which the politician has jurisdiction, and firms headquartered in highly corrupt countries.

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