Betting on the Wrong Horse: Lobbying on TPP and the 2016 U.S. Presidential Election
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We provide systematic evidence that lobbying by firms on trade agreements matters fortheir stock prices. We leverage a unique shock to U.S. trade policy – the unexpected victoryof Donald Trump in the 2016 U.S. presidential election, and the de facto U.S. withdrawalfrom the Trans-Pacific Partnership (TPP). We find that stocks of companies that advocatedfor TPP underperformed, experiencing a reduction in share prices by 3.15%. Further, firmswhose lobbying efforts were prominently covered in online news media and those lobbyingon provisions of particular interest to the U.S. faced more pronounced losses.
