Impact of company-government meetings on market outcomes

: evidence from the UK

Abstract

This thesis explores the concept of corporate political activity and firm performance in the UK general elections and the Brexit referendum (2012 to 2019), focusing on the dynamics of political interactions and market outcomes. An event study approach measures performance through Cumulative Abnormal Returns (CARs). Using a one-factor and a three-factor model to estimate abnormal returns, companies interacting with government officials got CARs of 0.63% to 1.71% in the centred three-day event window (-1, +1) and slightly higher returns for those who engage in political activities frequently. However, those meeting the most influential politicians had slightly lower CARs, while those linked with the party that won the election had better positive abnormal returns. Surrounding the Brexit referendum, firms that engaged in political activity with high-ranking politicians got CARs of 2.66% in the Centred three-day event window. However, when tested using the three-factor model, political engagement became less significant around the Brexit referendum.

Date of Award	28 Jan 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Jörg Stahl (Supervisor)