Date of Award


Degree Name

Doctor of Philosophy


Business Administration

First Advisor

Zhao, Wanli


The first chapter examines the effect of political connections between mutual fund managers and politicians on fund performance. Using publicly available data of individual political contribution, we classify mutual funds as political connected when the managers make contributions. First, we show that political connected funds’ aggregated stock holding change predicts subsequent abnormal stock return around earnings announcement day, implying that political connection promotes manager’s stock picking ability. Further evidence using sample of entry buys and exit sells shows that political connected funds outperform non-connected funds by 82 basis points annually. Second, we provide evidence that the earnings forecast accuracy for firm whose stocks are held by political connected funds improves significantly when time is approaching announcement date, highlighting the political channel through which information flow is facilitated between firm and market. The second chapter argues that while corporate innovation facilitates value-creation and long-term growth, patents protect the firm’s innovative findings and intellectual property rights. We suggest that legal expertise of the managers and the board provide valuable legal assistance with the patenting process. We document that firms with greater board legal expertise are more likely to file patents and quicker approval of the patent applications. These results suggest the director legal expertise contributes to firm’s innovation activities by offering better counseling on the patenting process and corresponding legal issues.




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