The market value of oolitical alignment: recent U.S. evidence

Hafeez, Bilal ORCID: https://orcid.org/0000-0003-3628-0860, Tosun, Onur Kemal ORCID: https://orcid.org/0000-0003-2551-1408 and Eshraghi, Arman 2026. The market value of oolitical alignment: recent U.S. evidence. Finance Research Letters , 109758. 10.1016/j.frl.2026.109758

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Abstract

Examining publicly-listed U.S. firms, we illustrate investor reactions to the removal of the SEC’s nonpartisan Enforcement Director’s authority on March 10, 2025. Over the subsequent three days, Republican-leaning firms gain an average of around $139 million in market value, representing 2.5% of the median firm market cap in our sample. We show equity investors reward alignment with the incumbent administration while imposing no penalty for misalignment. These findings are more pronounced when a firm’s CEO and CFO are both Republican-leaning, highlighting the role of political alignment in market valuations, particularly in times of regulatory restructuring.

Item Type:	Article
Date Type:	Published Online
Status:	In Press
Schools:	Schools > Business (Including Economics)
Publisher:	Elsevier BV
ISSN:	1544-6123
Date of Acceptance:	4 March 2026
Last Modified:	09 Mar 2026 11:31
URI:	https://orca.cardiff.ac.uk/id/eprint/185594

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