ABSTRACT Republicans start more firms than Democrats. In a sample of 40 million party‐identified Americans between 2005 and 2017, we find that 5.5% of Republicans and 3.7% of Democrats become entrepreneurs. This partisan entrepreneurship gap is time‐varying—Republicans increase their relative entrepreneurship during Republican administrations and decrease it during Democratic administrations, amounting to a partisan reallocation of 170,000 new firms over our 13‐year sample. We find sharp changes in partisan entrepreneurship around the elections of President Obama and President Trump, with the strongest effects among the most politically active partisans: those that donate and vote.

Abstract We document political sentiment effects on U.S. inventors. Democratic inventors are more likely to patent (relative to Republicans) after the 2008 election of Obama but less likely after the 2016 election of Trump. These effects are at least twice as strong among politically active Democrats and are present even within firms and within firm$ × $technology. We also show that partisans tend to cluster in technologies (e.g., Democrats in Biotechnology and Republicans in Weapons), so that sentiment effects aggregate to more patents in the technologies dominated by the winning party.

We examine social media attention and sentiment from three major platforms: Twitter, StockTwits, and Seeking Alpha. We find that, even after controlling for firm disclosures and news, attention is highly correlated across platforms, but sentiment is not: its first principal component explains little more variation than purely idiosyncratic sentiment. Using market events, we attribute differences across platforms to differences in users (e.g., professionals versus novices) and differences in platform design (e.g., character limits in posts). We also find that sentiment and attention contain different return-relevant information. Sentiment predicts positive next-day returns, but attention predicts negative next-day returns. These results highlight the importance of considering both social media sentiment and attention, and of distinguishing between different investor social media platforms.