Social Media and Political Contributions: The Impact of New Technology on Political Competition

TL;DR

This study examines how adopting Twitter influences political campaign contributions, finding that new politicians benefit from increased donations in regions with high Twitter penetration, potentially lowering entry barriers in politics.

Contribution

It provides empirical evidence that social media, especially Twitter, can enhance political competition by increasing donations for new politicians, highlighting the role of technology in political entry.

Findings

Twitter adoption increases donations by 0.7-2% in high-penetration regions.

New politicians see a 1-3.1% increase in donations after adopting Twitter.

Effect driven mainly by new donors and candidates without Facebook accounts.

Abstract

Political campaigns are among the most sophisticated marketing exercises in the United States. As part of their marketing communication strategy, an increasing number of politicians adopt social media to inform their constituencies. This study documents the returns from adopting a new technology, namely Twitter, for politicians running for Congress by focusing on the change in campaign contributions received. We compare weekly donations received just before and just after a politician opens a Twitter account in regions with high and low levels of Twitter penetration, controlling for politician-month fixed effects. Specifically, over the course of a political campaign, we estimate that the differential effect of opening a Twitter account in regions with high vs low levels of Twitter penetration amounts to an increase of 0.7-2% in donations for all politicians and 1-3.1% for new politicians, who were never elected to the Congress before. In contrast, the effect of joining Twitter for experienced politicians remains negligibly small. We find some evidence consistent with the explanation that the effect is driven by new information about the candidates, e.g., the effect is primarily driven by new donors rather than past donors, by candidates without Facebook accounts and tweeting more informatively. Overall, our findings imply that social media can intensify political competition by lowering costs of disseminating information for new entrants to their constituents and thus may reduce the barriers to enter politics.