Who Pays a Visit to Brussels? The Firm Value of Cross-Border Political Access to European Commissioners
44 Pages Posted: 27 Mar 2019 Last revised: 29 Oct 2020
Date Written: July 1, 2020
We present novel evidence on the value of cross-border political access. We analyze data on meetings of US multinational enterprises (MNEs) with European Commission (EC) policymakers. Meetings with Commissioners are associated with positive abnormal equity returns. We study channels of value creation through political access in the areas of regulation and taxation. US enterprises with EC meetings are more likely to receive favorable outcomes in their European merger decisions and have lower effective tax rates on foreign income than their peers without meetings. Our results suggest that access to foreign policymakers is of substantial value for MNEs.
Keywords: Cross-border political access, European Commission, firm value
JEL Classification: D72, G30
Suggested Citation: Suggested Citation