Corporate Lobbying and Firm Performance

42 Pages Posted: 13 Sep 2007 Last revised: 7 Oct 2014

See all articles by Hui Chen

Hui Chen

University of Zurich

David C. Parsley

Vanderbilt University – Finance and Economics

Ya-Wen Yang

Wake Forest University - Schools of Business

Multiple version iconThere are 2 versions of this paper

Date Written: October 2014


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.

Keywords: Corporate Lobbying, political strategy, market returns, portfolio

JEL Classification: G3, G14, G18, G38, D22

Suggested Citation

Chen, Hui and Parsley, David C. and Yang, Ya-Wen, Corporate Lobbying and Firm Performance (October 2014). Available at SSRN: or

Hui Chen (Contact Author)

University of Zurich ( email )

Plattenstrasse 14
Zurich, CH-8032

David C. Parsley

Vanderbilt University – Finance and Economics ( email )

401 21st Avenue South
Nashville, TN 37203
United States
615-322-0649 (Phone)
615-343-7177 (Fax)

HOME PAGE: http://

Ya-Wen Yang

Wake Forest University - Schools of Business ( email )

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States
336-758-2934 (Phone)

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