Copyright (c) 2008 All rights reserved. http://works.bepress.com/david_parsley Recent documents in David C. Parsley en-us Fri, 18 Apr 2008 02:33:02 PDT 3600 http://works.bepress.com/david_parsley/12 http://works.bepress.com/david_parsley/12 Wed, 16 Apr 2008 06:31:47 PDT Corporate lobbying activities are designed to influence legislators and thus to further corporate goals by encouraging favorable policies and/or outcomes. Using data that became available after the passage of the Lobbying Disclosure Act of 1995, this study evaluates the effectiveness of corporate lobbying from a financial perspective. We find that a firm's lobbying expenses are positively correlated with its accounting-based financial performance. We also demonstrate that lobbying expenses are value-relevant to firms' market valuation. Finally, we use a portfolio approach to compare stock returns of lobbying firms with non-lobbying firms. We find that portfolios of firms with higher lobbying intensities significantly outperform their benchmarks as well as portfolios of firms with zero lobbying spending. Hui Chen Political Connections