Ownership Structure and Political Spending Disclosure

Ali, H., Adegbite, E. and Nguyen, T. (2021) Ownership structure and political spending disclosure. Accounting Forum, Forthcoming.

Posted: 10 May 2021 Last revised: 11 May 2021

See all articles by Hesham Ali

Hesham Ali

University of Nottingham; Mansoura University

Emmanuel Adegbite

University of Nottingham

Tam Nguyen

University of Nottingham

Date Written: May 9, 2021

Abstract

This study examines the link between ownership structure and political spending disclosure (PSD). We break down ownership into four different groups of shareholders: institutional, insider, governmental and foreign. Using a unique dataset provided by CPA-Zicklin for PSD and a panel dataset from S&P 500 companies between 2015 and 2018, our results reveal that institutional and governmental ownership are positively associated with the level of PSD, while insider ownership is negatively associated with the level of PSD. Additionally, while prior literature mainly investigated how ownership structure influences disclosure practices, we analyse the mechanisms through which ownership characteristics influence PSD. Our cross-sectional tests provide evidence that insider owners exhibit more PSD if they are pursing tax-related lobbying expenses and tax avoidance practices. Additionally, governmental owners demand lower PSD in firms with higher nonfinancial and financial reporting quality. Finally, institutional owners demand more PSD in the case of lower industry concentration. Overall, we conclude that different owners have distinct impacts and preferences on a firm’s political strategy and various mechanisms uniquely operationalize the interactions between different owners and political transparency. Through agency theory, our results advance heated debates on PSD – an emerging, yet hitherto less examined, category of voluntary disclosure.

Keywords: Political Spending Disclosure, Corporate Governance, Ownership Structure, Voluntary Disclosure, Political Transparency

Suggested Citation

Ali, Hesham and Ali, Hesham and Adegbite, Emmanuel and Nguyen, Tam, Ownership Structure and Political Spending Disclosure (May 9, 2021). Ali, H., Adegbite, E. and Nguyen, T. (2021) Ownership structure and political spending disclosure. Accounting Forum, Forthcoming., Available at SSRN: https://ssrn.com/abstract=3842523

Hesham Ali

University of Nottingham ( email )

Jubilee Campus
Nottingham, Nottinghamshire NG8 1BB
United Kingdom

Mansoura University ( email )

Mansoura, 35516
Egypt

Emmanuel Adegbite (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Tam Nguyen

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
01158467073 (Phone)
NG8 1BB (Fax)

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