Corporate Political Strategies
Southern Illinois University at Carbondale - Department of Finance
Willamette University - Atkinson Graduate School of Management
March 1, 2011
Accounting & Finance, Vol. 51, Issue 1, pp. 252-277, 2011
The paper offers a comprehensive and integrative review of the current literature on corporate political strategies sharing common boundaries with finance, accounting and corporate governance. While there appears to be a heightened interest among researchers in studying the value relevance of corporate political strategies [Chen etal. (2010), Goldman etal. (2009), Cooper etal. (2010), Richter etal. (2008), Hochberg etal. (2007), de Figueiredo and Edwards (2007), Faccio and Parsley (2009), and Myers (2009) among others], interestingly, finance and corporate governance scholars have yet to embrace the research on political strategies as part of their mainstream research. Taking a micro perspective at the firm level, we review the major scholarly works in the economics, finance and management disciplines with respect to the firm attributes shaping the corporate decision to engage politically, modes of corporate political participation, and the value impact of corporate political activity. The overarching theme of the review article is to integrate diverse political economy and management paradigms of corporate political participation and rationalize the value relevance within the corporate finance and corporate governance perspective. The paper also presents focused preliminary evidence on the determinants and value impact of corporate lobbying strategies. For the sample of 5452 firm-year observations, the results indicate that while for large firms corporate lobbying may not be agency driven and may create value, for small firms, despite low shareholder rights associating with higher lobbying engagements, lobbying still relates positively to value added.
Number of Pages in PDF File: 26
Keywords: Corporate political strategies, Shareholder rights, Agency conflict, Lobbying, G30
Date posted: March 2, 2011
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