Determinants and Effects of Corporate Lobbying

Financial Management, Forthcoming

53 Pages Posted: 16 Jun 2009 Last revised: 30 Jul 2013

See all articles by Matthew D. Hill

Matthew D. Hill

Arkansas State University

G. W. Kelly

University of Southern Mississippi; Mississippi State University - Department of Finance and Economics

G. Brandon Lockhart

Clemson University - Department of Finance

Robert A. Van Ness

University of Mississippi - Department of Finance

Date Written: June 28, 2013

Abstract

We examine the determinants and value effects of corporate lobbying, controlling for corporate PAC campaign contributions. We find evidence that firms with greater potential payoffs from favorable policy and regulations lobby most actively, and that managers often utilize both lobbying and campaign contribution channels to influence the political climate affecting the firm. We also find that shareholders value the lobbying activities pursued by management on their behalf, particularly if the firm does not have a PAC that contributed to an election campaign. The results are robust to a number of tests designed to mitigate potential omitted-variable and self-selection bias.

Keywords: Corporate Lobbying, Political Connections, Market Value

Suggested Citation

Hill, Matthew D. and Kelly, Gary Wayne and Lockhart, G. Brandon and Van Ness, Robert A., Determinants and Effects of Corporate Lobbying (June 28, 2013). Financial Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1420224 or http://dx.doi.org/10.2139/ssrn.1420224

Matthew D. Hill (Contact Author)

Arkansas State University ( email )

2713 Pawnee
P.O. Box 1750
Jonesboro, AR 72467-115
United States

Gary Wayne Kelly

University of Southern Mississippi ( email )

118 College Drive
#5076
Hattiesburg, MS 39406
United States
601 266 4959 (Phone)
601 266 6110 (Fax)

Mississippi State University - Department of Finance and Economics ( email )

Mississippi State, MS 39762
United States

G. Brandon Lockhart

Clemson University - Department of Finance ( email )

Clemson, SC 29634
United States

Robert A. Van Ness

University of Mississippi - Department of Finance ( email )

Oxford, MS 38677
United States

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