Abstract

http://ssrn.com/abstract=2023019
 
 

Citations (3)



 


 



The Corporate Value of (Corrupt) Lobbying


Alexander Borisov


University of Cincinnati

Eitan Goldman


Indiana University - Kelley School of Business - Department of Finance

Nandini Gupta


Indiana University - Kelley School of Business - Department of Finance

February 4, 2015


Abstract:     
Using an event study, we examine whether the stock market considers corporate lobbying to be a value-enhancing activity. On January 3, 2006, lobbyist Jack Abramoff pleaded guilty to bribing politicians, which generated intense scrutiny of lobbyists, limiting their political influence. Using this event as a negative exogenous shock to the ability of firms to lobby, we show that a firm that spends $100,000 more on lobbying in the three years prior to 2006, experiences a loss of about $1.2 million in value around the guilty plea. We also find results consistent with the view that part of the value from lobbying may arise from potentially unethical practices.

Number of Pages in PDF File: 52

Keywords: corruption, event study, lobbying, political connections, shareholder value

JEL Classification: G14, G18, G38, D72


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Date posted: March 16, 2012 ; Last revised: February 7, 2015

Suggested Citation

Borisov, Alexander and Goldman, Eitan and Gupta, Nandini, The Corporate Value of (Corrupt) Lobbying (February 4, 2015). Available at SSRN: http://ssrn.com/abstract=2023019 or http://dx.doi.org/10.2139/ssrn.2023019

Contact Information

Alexander Borisov
University of Cincinnati ( email )
Cincinnati, OH 45221-0389
United States
Eitan Goldman
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-856-0749 (Phone)

Nandini Gupta (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3416 (Phone)
812-855-5875 (Fax)

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