Hostname: page-component-cb9f654ff-k7rjm Total loading time: 0 Render date: 2025-08-22T02:14:33.971Z Has data issue: false hasContentIssue false
  • English
  • Français

Corporate Lobbying Revisited

Published online by Cambridge University Press:  20 January 2017

Jin-Hyuk Kim
Jin-Hyuk Kim*
Affiliation:
Cornell University
Get access Rights & Permissions [Opens in a new window]

Abstract

Using a panel data of S&P 500 Index firms covering 1998–2004, this paper compares the determinants of lobbying expenditures and campaign contributions and estimates the returns to lobbying as assessed by the financial market. Lobbying depends more on managerial incentives and protection needs beyond industry structures than contributions do. Lobbying also has a positive effect on the firm's equity returns relative to the market and, to a lesser degree, relative to its industry.

Keywords

corporate lobbyingcampaign contributionsstock returns

Information

Type
Article
Information
Business and Politics , Volume 10 , Issue 2 , August 2008 , pp. 1 - 23
Copyright
Copyright © V.K. Aggarwal 2008 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

[1] Austen-Smith, David (1995). “Campaign Contributions and Access.” American Political Science Review 89: 566–581.CrossRefGoogle Scholar
[2] Baltagi, Badi (1981). “Simultaneous Equations with Error Components.” Journal of Econometrics 17: 189–200.CrossRefGoogle Scholar
[3] Banz, Rolf (1981). “The Relationship between Return and Market Value of Common Stocks.” Journal of Financial Economics 9: 3–18.CrossRefGoogle Scholar
[4] Baron, David (2002). Business and Its Environment. 3rd ed. Prentice-Hall.Google Scholar
[5] Boies, John (1989). “Money, Business, and the State: Material Interests, Fortune 500 Companies, and the Size of PACs.” American Sociological Review 54: 821–33.CrossRefGoogle Scholar
[6] Bonardi, Jean-Philippe, Hillman, Amy, & Keim, Gerald (2005). “The Attractiveness of Political Markets: Implication for Firm Strategies.” Academy of Management Review 30: 397–413.CrossRefGoogle Scholar
[7] Bonardi, Jean-Philippe, Holburn, Guy, and Vanden Bergh, Richard (2006). “Nonmarket Performance: Evidence from U.S. Electric Utilities.” Academy of Management Journal 49: 1209–1228.CrossRefGoogle Scholar
[8] Brainard, Lael, & Verdier, Thierry (1997). “The Political Economy of Declining Industries: Senescent Industry Collapse Revisited.” Journal of International Economics 42: 221–237.CrossRefGoogle Scholar
[9] Brasher, Holly, and Lowery, David (2006). “The Corporate Context of Lobbying Activity.” Business and Politics Vol. 8: Iss. 1, Article 1.CrossRefGoogle Scholar
[10] Chen, Hui, Parsley, David, and Yang, Ya-Wen (2008). “Corporate Lobbying and Financial Performance.” mimeo.Google Scholar
[11] de Figueiredo, John, & Silverman, Brian (2006). “Academic Earmarks and the Returns to Lobbying.” Journal of Law and Economics 49: 597–625.CrossRefGoogle Scholar
[12] de Figueiredo, John, & Tiller, Emerson (2001). “The Structure and Conduct of Corporate Lobbying: An Empirical Analysis of Corporate Lobbying at the Federal Communications Commission.” Journal of Economics and Management Strategy 10: 91–122.Google Scholar
[13] Drope, Jeffrey, and Hansen, Wendy (2006). “Does Firm Size Matter? Analysing Business Lobbying in the United States.” Business and Politics Vol. 8: Iss. 2, Article 4.CrossRefGoogle Scholar
[14] El-Agraa, Ali (1987). Protection, Cooperation, Development and Integration. Macmillan.CrossRefGoogle Scholar
[15] Fisman, Raymond (2001). “Estimating the Value of Political Connections.” American Economic Review 91: 1095–1102.CrossRefGoogle Scholar
[16] Goldberg, Pinelopi, & Maggi, Giovanni (1999). “Protection for Sale: An Empirical Investigation.” American Economic Review 89: 1135–1155.CrossRefGoogle Scholar
[17] Gompers, Paul, Ishii, Joy, & Metrick, Andrew (2003). “Corporate Governance and Equity Prices.” Quarterly Journal of Economics 118: 107–155.CrossRefGoogle Scholar
[18] Gordon, Sanford and Hafer, Catherine. (2005). “Flexing Muscle: Corporate Political Expenditures as Signals to the Bureaucracy.” American Political Science Review, Volume 99: 245–261.CrossRefGoogle Scholar
[19] Gordon, Sanford & Landa, Dimitri (2007). “Consumption or Investment? On Motivations for Political Giving.” Journal of Politics 69: 1057–1072.CrossRefGoogle Scholar
[20] Gray, Virginia, & Lowery, David (1997). “Reconceptualizing PAC Formation: It's Not a Collective Action Problem and It May Be an Arms Race.” American Politics Quarterly 25: 319–46.CrossRefGoogle Scholar
[21] Grier, Kevin, Munger, Michael, & Roberts, Brian (1991). “The Industrial Organization of Corporate Political Participation.” Southern Economic Journal 57: 727–738.CrossRefGoogle Scholar
[22] Grier, Kevin, Munger, Michael, & Roberts, Brian (1994). “The Determinants of Industry Political Activity, 1978-1986.” American Political Science Review 88: 911–926 CrossRefGoogle Scholar
[23] Grossman, Gene, & Helpman, Elhanan (1996). “Rent Dissipation, Free Riding, and Trade Policy.” European Economic Review 40: 795–803.CrossRefGoogle Scholar
[24] Hansen, Wendy, & Mitchell, Neil (2000). “Disaggregating and Explaining Corporate Political Activity: Domestic and Foreign Corporations in National Politics.” American Political Science Review 94: 891–903.CrossRefGoogle Scholar
[25] Hansen, Wendy, & Drope, Jeffrey (2005). “The Logic of Private and Collective Action.” American Journal of Political Science 49: 150–167.CrossRefGoogle Scholar
[26] Hart, David (2001). “Why Do Some Firms Give? Why Do Some Give a Lot?: High-Tech PACs, 1977–1996.” Journal of Politics 63: 1230–1249.CrossRefGoogle Scholar
[27] Hillman, Amy, & Hitt, Michael (1999). “Corporate Political Strategy Formulation: A Model of Approach, Participation, and Strategy Decisions.” Academy of Management Review 24: 825–842.CrossRefGoogle Scholar
[28] Hillman, Amy, Keim, Gerald, & Schuler, Douglas (2004). “Corporate Political Activity: A Review and Research Agenda.” Journal of Management 30: 837–857.CrossRefGoogle Scholar
[29] Hillman, Arye (1982). “Declining Industries and Political-Support Protectionist Motives.” American Economic Review 72: 1180–1187.Google Scholar
[30] Hou, Kewei, & Robinson, David (2006). “Industry Concentration and Average Stock Returns.” Journal of Finance 61: 1927–1956.CrossRefGoogle Scholar
[31] Humphries, Craig (1991). “Corporations, PACs and the Strategic Link Between Contributions and Lobbying Activities.” Political Research Quarterly 44: 353–372.Google Scholar
[32] Jayachandran, Seema (2006). “The Jeffords Effect.” Journal of Law and Economics 49: 397–425.CrossRefGoogle Scholar
[33] Knight, Brian (2006). “Are Policy Platforms Capitalized into Equity Prices: Evidence from Equity Markets during the Bush/Gore 2000 Presidential Election.” Journal of Public Economics 90: 751–773.CrossRefGoogle Scholar
[34] Kroszner, Randall, & Stratmann, Thomas (1998). “Interest-Group Competition and the Organization of Congress: Theory and Evidence from Financial Services’ Political Action Committees.” American Economic Review 88: 1163–1187.Google Scholar
[35] Langbein, Laura (1986). “Money and Access: Some Empirical Evidence.” Journal of Politics 48: 1052–1062.CrossRefGoogle Scholar
[36] Milyo, Jeffrey, Primo, David, and Groseclsoe, Timothy (2000). “Corporate PAC Campaign Contributions in Perspective.” Business and Politics Vol. 2: Iss. 1, Article 5.CrossRefGoogle Scholar
[37] Olson, Mancur (1965). The Logic of Collective Action. Harvard University Press.Google Scholar
[38] Potters, Jan, & Sloof, Randolph (1996). “Interest Groups: A Survey of Empirical Models That Try to Assess Their Influence.” European Journal of Political Economy 12: 403–442.CrossRefGoogle Scholar
[39] Sabato, Larry (1984). PAC Power: Inside the World of Political Action Committees. Norton.Google Scholar
[40] Schuler, Douglas (1996). “Corporate Political Strategy and Foreign Competition: The Case of the Steel Industry.” Academy of Management Journal 39: 720–737.CrossRefGoogle Scholar
[41] Schuler, Douglas, Rehbein, Kathleen, & Cramer, Roxy (2002). “Pursuing Strategic Advantage through Political Means: A Multivariate Approach.” Academy of Management Journal 45: 659–672.CrossRefGoogle Scholar
[42] Tripathi, Micky, Ansolabehere, Steven, and Snyder, James (2002). “Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act.” Business and Politics Vol. 4: Iss. 2, Article 2.CrossRefGoogle Scholar
[43] Tullock, Gordon (1967). “The Welfare Costs of Tariffs, Monopolies, and Theft.” Western Economic Journal 5: 224–232.Google Scholar
[44] Wright, John (1990). “Contributions, Lobbying, and Committee Voting in the U.S. House of Representatives.” American Political Science Review 84: 417–438.CrossRefGoogle Scholar
[45] Zardkoohi, Asghar (1985). “On the Political Participation of the Firm in the Electoral Process.” Southern Economic Journal 51: 804–817.CrossRefGoogle Scholar