Abstract

http://ssrn.com/abstract=1375082
 
 

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Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations


Raquel Meyer Alexander


Washington and Lee University

Stephen W. Mazza


University of Kansas - School of Law

Susan Scholz


University of Kansas - Accounting and Information Systems Area

April 8, 2009

Journal of Law and Politics, Vol. 25, No. 401, 2009

Abstract:     
In this paper we use audited corporate tax disclosures relating to a tax holiday on repatriated earnings created by the American Jobs Creation Act of 2004 to examine the return on lobbying. We find firms lobbying for this provision have a return in excess of $220 for every $1 spent on lobbying, or 22,000%. Repatriating firms are more profitable overall, but surprisingly, profitability is not a predictor of repatriation amount. Rather, industry and firm size are most predictive of repatriation. Cash on hand, a proxy for ability to repatriate, is not associated with the repatriation decision or the repatriation amount. This paper provides compelling evidence that lobbying expenditures have a positive and significant return on investment.

Number of Pages in PDF File: 36

Keywords: Multinational Firms, Corporate Taxation, Repatriation, Lobbying

JEL Classification: F23, H20, H25, K34

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Date posted: April 10, 2009 ; Last revised: June 19, 2012

Suggested Citation

Alexander, Raquel Meyer and Mazza, Stephen W. and Scholz, Susan, Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations (April 8, 2009). Journal of Law and Politics, Vol. 25, No. 401, 2009. Available at SSRN: http://ssrn.com/abstract=1375082 or http://dx.doi.org/10.2139/ssrn.1375082

Contact Information

Raquel Meyer Alexander
Washington and Lee University ( email )
Lexington, VA 24450
United States
Stephen W. Mazza (Contact Author)
University of Kansas - School of Law ( email )
Green Hall
1535 W. 15th Street
Lawrence, KS 66045-7577
United States
Susan Scholz
University of Kansas - Accounting and Information Systems Area ( email )
1300 Sunnyside Ave
Lawrence, KS 66045
United States
785-864-7554 (Phone)
785-864-5328 (Fax)
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