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Stock Ownership and Political Behavior: Evidence from Demutualizations



Publishing details

Management Science

Authors / Editors

Knüpfer S;Kaustia M;Torstila S

Publication Year



We show the behavior of individuals is affected by the type of financial instrument they hold. A natural experiment in which customer-owned mutual companies converted to publicly listed firms created a plausibly exogenous shock to the stock market participation status of tens of thousands of people. We find the shock led to a change in the way people vote in parliamentary elections in the affected areas, with a 10% increase in stock market participation rate being followed by a 1.3%–3.1% increase in right-of-center vote share. The institutional details as well as additional tests suggest that wealth, liquidity, and tax-related incentives cannot fully explain the results. A plausible explanation is that the associated increase in the salience of stock ownership causes a shift in voters’ attention.


Stock market participation, political behavior, salience, attention


Management Science

Available on ECCH


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