DP11808 | Social Media and Political Donations: New Technology and Incumbency Advantage in the United States

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Can new technologies increase political competition? We study the impact of adopting Twitter on campaign contributions received by politicians. For identification, we compare donations just before and just after politicians open Twitter accounts in regions with high and low levels of Twitter penetration, controlling for politician-month fixed effects. We estimate that opening a Twitter account amounts to an increase of at least 2-3% in donations per campaign. This effect is stronger for new politicians, who were never elected before, for donations coming from new donors, for politicians who tweet more informatively, and for politicians from regions with lower newspaper circulation.