Political Representation and Governance: Evidence from the Investment Decisions of Public Pension Funds

Political Representation and Governance: Evidence from the Investment Decisions of Public Pension Funds

  • ALEKSANDAR ANDONOV
  • YAEL V. HOCHBERG
  • JOSHUA D. RAUH

Article first published online: 19th June 2018 DOI: 10.1111/jofi.12706

Abstract


Representation on pension fund boards by state officials—often determined by statute decades past—is negatively related to the performance of private equity investments made by the pension fund, despite state officials’ relatively strong financial education and experience. Their underperformance appears to be partly driven by poor investment decisions consistent with political expediency, and is also positively related to political contributions from the finance industry. Boards dominated by elected rank‐and‐file plan participants also underperform, but to a smaller extent and due to these trustees’ lesser financial experience.

Sign in to access the full article.

Related articles


ANNOUNCEMENTS

Article first published online: 18th October 2018 / DOI: 10.1111/jofi.12570

Read Article

ISSUE INFORMATION FM

Article first published online: 18th October 2018 / DOI: 10.1111/jofi.12572

Read Article

ISSUE INFORMATION BM

Article first published online: 18th October 2018 / DOI: 10.1111/jofi.12573

Read Article

MISCELLANEA

Article first published online: 18th October 2018 / DOI: 10.1111/jofi.12569

Read Article

Do Rare Events Explain CDX Tranche Spreads?

  • SANG BYUNG SEO
  • JESSICA A. WACHTER

Article first published online: 10th August 2018 / DOI: 10.1111/jofi.12705

Read Article

Anomalies and News

  • JOSEPH ENGELBERG
  • R. DAVID MCLEAN
  • JEFFREY PONTIFF

Article first published online: 9th August 2018 / DOI: 10.1111/jofi.12718

Read Article

Are you an Author?


Please read our submission requirements and find out how to submit your paper to the Journal of Finance

Submit a paper