IDEAS home Printed from https://ideas.repec.org/a/bla/finrev/v44y2009i1p59-85.html
   My bibliography  Save this article

Division Manager Lobbying Power and the Allocation of Capital

Author

Listed:
  • Chris R. McNeil
  • Thomas I. Smythe

Abstract

We investigate whether division manager lobbying power affects the allocation of capital in multi‐divisional firms. We find that firm‐level disparities in division manager lobbying power (measured by tenure, time‐in‐position, board membership, and top executive status) affect capital allocation in expected ways. Managers with greater relative lobbying power compete for capital expenditures from a position of strength. Evidence is also provided which suggests that division manager ownership mitigates lobbying efforts. Furthermore, disparity in division manager lobbying power is associated with lower firm excess value. These results support the view that division manager influence activities impact the operation of internal capital markets.

Suggested Citation

  • Chris R. McNeil & Thomas I. Smythe, 2009. "Division Manager Lobbying Power and the Allocation of Capital," The Financial Review, Eastern Finance Association, vol. 44(1), pages 59-85, February.
    • Handle: RePEc:bla:finrev:v:44:y:2009:i:1:p:59-85
    DOI: 10.1111/j.1540-6288.2008.00210.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1540-6288.2008.00210.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1540-6288.2008.00210.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dey, Tania & Banerjee, Rajabrata, 2011. "Can Corporate Diversification Promote Firm Value? A Survey," MPRA Paper 28928, University Library of Munich, Germany.
    2. Vinod Mishra & Rajabrata Banerjee & Tania Dey, 2011. "Influence Activity And Allocation Of Firms' Internal Capital: Evidence From Australia," Monash Economics Working Papers 38-11, Monash University, Department of Economics.
    3. Graham, John R. & Harvey, Campbell R. & Puri, Manju, 2015. "Capital allocation and delegation of decision-making authority within firms," Journal of Financial Economics, Elsevier, vol. 115(3), pages 449-470.
    4. USHIJIMA Tatsuo, 2021. "The Liability of Aging in Internal Capital Markets," Discussion papers 21065, Research Institute of Economy, Trade and Industry (RIETI).
    5. Glaser, Markus & López de Silanes, Florencio & Sautner, Zacharias, 2008. "Looking inside a conglomerate : efficiency of internal capital allocation and managerial power within a firm," Papers 08-24, Sonderforschungsbreich 504.
    6. Daniel Coster & Drew Dahl, 2022. "Subjective Assessment of Managerial Performance and Decisionmaking in Banking," Review, Federal Reserve Bank of St. Louis, vol. 104(3), pages 210-223, July.
    7. Benz, Andreas & Demerjian, Peter R. & Hoang, Daniel & Ruckes, Martin E., 2024. "Picking winners: Managerial ability and capital allocation," Working Paper Series in Economics 163, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:finrev:v:44:y:2009:i:1:p:59-85. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/efaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.