The Jeffords Effect

  title={The Jeffords Effect},
  author={Seema Jayachandran},
In May 2001 Senator Jim Jeffords left the Republican Party and tipped control of the U.S. Senate to the Democrats. This paper uses the surprise event to demonstrate what I term the "Jeffords effect": changes in the political landscape have large effects on the market value of firms. I use a firm’s soft money donations to the national parties as the measure of how the firm aligns itself politically. In this event study of large public firms, a firm lost 0.8% of market capitalization the week of… CONTINUE READING
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