Corporate Distress and Lobbying: Evidence from the Stimulus Act

51 Pages Posted: 27 Nov 2013 Last revised: 30 May 2015

See all articles by Manuel Adelino

Manuel Adelino

Duke University; Duke Innovation & Entrepreneurship Initiative; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Serdar Dinc

Rutgers University

Date Written: November 20, 2013


The literature on distressed firms has focused on these firms' investment, capital structure, and labor decisions. This paper investigates a novel aspect of firm behavior in distress: how financial health affects a firm's lobbying and, consequently, its relationship with the government. We exploit the shock to non-financial firms during the 2008 financial crisis and the availability of the stimulus package in the first quarter of 2009. We find that firms with weaker financial health, as measured by credit default swap spreads, lobbied more. We also show that the amount spent on lobbying was associated with a greater likelihood of receiving stimulus funds.

Keywords: Distress, Lobbying, Stimulus, Financial Crisis, Political Economy

JEL Classification: G28, G01, G33

Suggested Citation

Adelino, Manuel and Dinc, Serdar, Corporate Distress and Lobbying: Evidence from the Stimulus Act (November 20, 2013). Journal of Financial Economics (JFE), Forthcoming, Available at SSRN: or

Duke Innovation & Entrepreneurship Initiative ( email )

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Durham, NC 27701
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National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

Serdar Dinc

Rutgers University ( email )

111 Washington Avenue
Newark, NJ 07102
United States


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