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Markku Kaustia's and Sami Torstila's paper accepted to Management Science

"Stock ownership and political behavior: Evidence from demutualizations"

Article "Stock ownership and political behavior: Evidence from demutualizations" by Markku Kaustia, Samuli Knüpfer (London Business School) and Sami Torstila has been accepted for publication in the Management Science.

Abstract

A setting in which customer-owned mutual companies converted to publicly listed firms created a plausibly exogenous shock to salience of stock ownership. We use this shock to identify the effect of stock ownership on political behavior. Using IV regressions, difference-in-differences analyses, and matching methods, we find the shock changed the way people vote in the affected areas, with the demutualizations being followed by a 1.7–2.7 percentage points increase in right-of-center vote share. Analyses of demutualizations that did not involve public listing of shares suggest that explanations based on wealth, liquidity, and tax-related incentives do not drive the results.

The paper can be downloaded at SSRN: http://ssrn.com/abstract=2209645.

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