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Campaign Contributions from Corporate Executives in Lieu of Political Action Committees

55 Pages Posted: 23 Mar 2013 Last revised: 13 Jul 2013

Brian Kelleher Richter

University of Texas at Austin - Red McCombs School of Business

Timothy Werner

University of Texas at Austin - Red McCombs School of Business

Date Written: July 12, 2013

Abstract

To distance themselves from the specter of special-interests, some Congressional candidates instituted personal bans on campaign contributions from corporate-linked political action committees (PACs). We leverage these to identify how corporate executives adapt their personal campaign contribution patterns in response to restrictions applied only to corporate-linked PACs but not to executives as individuals. In a newly constructed dataset, with 6,803,661 observations, that includes all CEO-firm-candidate contribution pairs for active S&P500 firms over an 18-year period, we find that corporate executives increase personal giving to specific candidates in lieu of their corporate-linked PACs in a form of cross-actor substitution among corporate-linked sources of campaign contributions. This finding has important implications for regulatory design in scenarios where cross-actor substitution is possible. Vis-à-vis campaign finance regulation, it suggests that bans on corporate-linked PAC contributions alone cannot prevent corporate-linked money from finding its way into candidates’ campaign coffers.

Keywords: Campaign Contributions, Regulation, Political Action Committees, Corporate Executives

JEL Classification: D72, L51

Suggested Citation

Richter, Brian Kelleher and Werner, Timothy, Campaign Contributions from Corporate Executives in Lieu of Political Action Committees (July 12, 2013). Available at SSRN: https://ssrn.com/abstract=2237685 or http://dx.doi.org/10.2139/ssrn.2237685

Brian Kelleher Richter (Contact Author)

University of Texas at Austin - Red McCombs School of Business ( email )

2100 Speedway
B6500, CBA 5.250
Austin, TX 78712
United States
512-232-6751 (Phone)

HOME PAGE: http://briankrichter.com/

Timothy Werner

University of Texas at Austin - Red McCombs School of Business ( email )

United States
5122326844 (Phone)

HOME PAGE: http://timothywerner.com

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