Location, Location, Location: Senate Trading and Seat Proximity

Using the distance between two Senators’ desks to capture the proclivity to share information, we find that when two Senators sit closer together in the Senate Chamber, they are more likely to trade stocks in the same industry and earn larger returns, especially when they belong to the same political party. This association varies with Senators’ information sources and power, and the scrutiny they face. We perform multiple identification tests to support our inference that Senators share private trading information gleaned from their positions in Congress. Moreover, we provide the first evidence on the career benefits associated with sharing information