Can Changes in the Electorate affect Firm Values? Evidence from the Introduction of Female Suffrage in Switzerland

Does the composition of the electorate affect corporate prospects? Electorates constantly change, and support-maximizing policymakers adjust their legislative behavior to accommodate shifts in voter preferences. If the policy adjustments impact individual firms or entire industries, it is crucial for corporate decision-makers to anticipate these. In this paper, I analyze a large-scale shock to the composition of the electorate - the introduction of female suffrage in Switzerland in 1971. Using a hand-collected dataset on Swiss firm level data and security prices, I show that investor responses and firm profitability are sensitive to expected changes in government policies that reflect female voters' preferences. The results suggest that considering the evolution of the electorate should be an integral part of corporate strategies