Add to ORKGThe 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 ...