Personal Financial Incentives and Corporate Campaign Contributions

32 Pages Posted: 2 Mar 2020

See all articles by Viktar Fedaseyeu

Viktar Fedaseyeu

China Europe International Business School (CEIBS)

Lev Lvovskiy

BEROC

Date Written: February 7, 2020

Abstract

Despite the well-documented benefits of political participation, few firms engage in politics. We argue that low levels of corporate political participation can be rationalized by financial incentives of employees and shareholders who are the ultimate source of corporate contributions. Since even large firm-level benefits are trivial for individuals with small equity-stakes, few people have sufficient incentives to contribute. This logic explains why corporate political contributions are relatively small and why firms seek alternative channels of political influence. Empirically, we document that corporate PACs are financially constrained and that financial incentives of individual contributors are a strong determinant of campaign contributions.

Keywords: PACs, Political Contributions, Corporate Political Influence

JEL Classification: D72, G30, G38, P48

Suggested Citation

Fedaseyeu, Viktar and Lvovskiy, Lev, Personal Financial Incentives and Corporate Campaign Contributions (February 7, 2020). Available at SSRN: https://ssrn.com/abstract=3535304 or http://dx.doi.org/10.2139/ssrn.3535304

Viktar Fedaseyeu (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

HOME PAGE: http://https://www.ceibs.edu/fviktar

Lev Lvovskiy

BEROC ( email )

Minsk
Belarus

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
18
Abstract Views
394
PlumX Metrics