Corporate Lobbying and Firm PerformanceJournal of Business, Finance, and Accounting (2015)
Corporate lobbying activities are designed to influence legislators, regulators, and courts, presumably to encourage favorable policies and/or outcomes. In dollar terms, corporate lobbying expenditures are typically one or even two orders of magnitude larger than spending by Political Action Committees (PAC), and unlike PAC donations, lobbying amounts are direct corporate expenditures. We use data made available by the Lobbying Disclosure Act of 1995, to examine this more pervasive form of corporate political activity. We find that on average, lobbying is positively related to accounting and market measures of financial performance. These results are robust across a number of empirical specifications. We also report market performance evidence using a portfolio approach. We find that portfolios of firms with the highest lobbying intensities significantly outperform their benchmarks in the three years following portfolio formation.
Publication DateSeptember, 2015
Citation InformationHui Chen, David C. Parsley and Ya-Wen Yang. "Corporate Lobbying and Firm Performance" Journal of Business, Finance, and Accounting Vol. 42 Iss. 3-4 (2015) p. 441 - 481 ISSN: 1468-5957
Available at: http://works.bepress.com/david_parsley/12/