Corporate Lobbying, Political Connections, and the 2008 Troubled Asset Relief Program

33 Pages Posted: 5 Jul 2011 Last revised: 1 Oct 2011

Benjamin M. Blau

Utah State University - Huntsman School of Business

Tyler Brough

Utah State University

Diana Weinert Thomas

Creighton University

Date Written: September 30, 2011

Abstract

Political involvement has long been shown to be a profitable investment for firms that seek favorable regulatory conditions or support in times of economic distress. But how important are different types of political involvement for the timing and magnitude of political support? To answer this question, we take a comprehensive look at the lobbying expenditures and political connections of banks that were recipients of government support under the 2008 Troubled Asset Relief Program (TARP). We find that firms that lobbied or had other types of political connections were not only more likely to receive TARP funds, they also received a greater amount of support earlier than firms that were not politically involved through lobbying or direct political connections. For every dollar spent on lobbying during the five years prior to the TARP bailout, firms received between $485.77 and $585.65 in TARP support.

Keywords: Lobbying, Corporate Bailouts, Government Policy, Regulation of Financial Institutions

JEL Classification: D72, D73, G28

Suggested Citation

Blau, Benjamin M. and Brough, Tyler and Thomas, Diana Weinert, Corporate Lobbying, Political Connections, and the 2008 Troubled Asset Relief Program (September 30, 2011). Available at SSRN: https://ssrn.com/abstract=1878653 or http://dx.doi.org/10.2139/ssrn.1878653

Benjamin M. Blau (Contact Author)

Utah State University - Huntsman School of Business ( email )

3500 Old Main Hill
Logan, UT 84322
United States

Tyler Brough

Utah State University ( email )

Logan, UT 84322
United States

Diana Weinert Thomas

Creighton University ( email )

2500 California Plaza
Omaha, NE 68178
United States

Paper statistics

Downloads
406
Rank
57,220
Abstract Views
2,878