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Article
Corporate Lobbying and Firm Performance
Journal of Business, Finance, and Accounting (2015)
  • Hui Chen, University of Zurich, Switzerland
  • David C. Parsley, OGSM, Vanderbilt University
  • Ya-Wen Yang, Wake Forest University
Abstract
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 Date
September, 2015
DOI
DOI: 10.1111/jbfa.12109
Citation Information
Hui 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/