Corporate Lobbying and Financial Performance

Chen, Hui and Parsley, David and Yang, Ya-wen (2010): Corporate Lobbying and Financial Performance.

Abstract

Corporate lobbying activities are designed to influence legislators and thus to further company goals by encouraging favorable policies and/or outcomes. Using data made available by the Lobbying Disclosure Act of 1995, this study examines corporate lobbying activities from a financial perspective. We find that on average, lobbying is positively related to accounting and market measures of financial performance. These results are robust across a number of empirical specifications and continue to hold when we account for potential sample selection. We also report market performance evidence using a portfolio approach. We find that portfolios of firms with the highest lobbying intensities significantly outperform their benchmarks in the three years following portfolio formation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate Lobbying, accounting performance, market returns, portfolio
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General; G - Financial Economics > G1 - General Financial Markets > G10 - General

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