Tor-Erik Bakke (University of Illinois at Chicago - Department of Finance), Hamed Mahmudi (University of Delaware - Department of Finance), Aazam Virani (University of Arizona - Department of Finance), & Song Zhang (University of Delaware - Department of Finance) have posted Politicization of the Supreme Court and Firm Value: Evidence from Ruth Bader Ginsburg’s Death on SSRN. Here is the abstract:
We exploit the sudden passing of justice Ruth Bader Ginsburg (RBG) – an event that signaled a more conservative Supreme Court of the US (SCOTUS) – to examine the impact of a change in the partisan composition of the SCOTUS on firm value. Consistent with a more conservative SCOTUS, we find that Republican-leaning firms exhibit more positive abnormal announcement returns around RBG's passing. This result is driven by industry-level political preferences. Republican-leaning firms located in Republican-controlled states exhibit more positive returns. Firms facing more political risk exhibit lower announcement returns, consistent with an increase in economic policy uncertainty following RBG’s passing.
