Lobbying with the Competition: Do Firm Differentiation, Law Specificity, and Firm Strategy Matter?

52 Pages Posted: 13 Aug 2018 Last revised: 29 Oct 2019

See all articles by Adam J. Olson

Adam J. Olson

University of Cincinnati - Department of Accounting

Frances M. Tice

University of Colorado at Boulder - Department of Accounting

Connie D. Weaver

Texas A&M University - Department of Accounting

Date Written: October 15, 2019

Abstract

In this paper, we examine how firms choose their lobbying participation given the competitive advantages that can be gained from: (1) firm-specific attributes in the form of differentiation, (2) specificity of tax laws under which firms operate, (3) and other tax strategy policies that firms have at their disposal to gain a competitive advantage. We use tax lobbying surrounding the 2004 American Jobs Creation Act and the 2017 Tax Cuts and Jobs Act as our empirical setting. We find that firm differentiation increases individual lobbying and decreases trade association lobbying when the laws being lobbied are narrow in scope. However, broader laws significantly reduce the relation between firm differentiation and individual lobbying. We also find that tax planning and tax lobbying is coordinated, and it is not impacted by law specificity. The findings from our study provide important insights into the circumstances under which firms will choose to lobby for laws and in what format firms will conduct their lobbying.

Keywords: corporate lobbying, firm differentiation, law specificity, firm strategy

Suggested Citation

Olson, Adam J. and Tice, Frances M. and Weaver, Connie D., Lobbying with the Competition: Do Firm Differentiation, Law Specificity, and Firm Strategy Matter? (October 15, 2019). Available at SSRN: https://ssrn.com/abstract=3220686 or http://dx.doi.org/10.2139/ssrn.3220686

Adam J. Olson (Contact Author)

University of Cincinnati - Department of Accounting ( email )

Cincinnati, OH 45221-0211
United States

Frances M. Tice

University of Colorado at Boulder - Department of Accounting ( email )

419 UCB
Boulder, CO 80309-0419
United States

Connie D. Weaver

Texas A&M University - Department of Accounting ( email )

430 Wehner
College Station, TX 77843-4353
United States

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