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Lobbying, political connectedness and financial performance in the air transportation industry

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  • Brown, Richard S.

Abstract

While there is a deeper understanding of the outcomes to firm-level political activities in general, there are very few papers that address this relationship in transportation studies. In this paper, I empirically test firm-level rent-seeking through corporate political activity (CPA) in the air transportation industry. I find, in a sample of 46 firms over 15 years, that lobbying intensity and political connections are positively related to subsequent profitability in both fixed-effects and random-effects estimations. I also test the interaction of these two main effects and find mixed support for the moderating effect of political connections on lobbying intensity. This paper contributes to the theoretical literature on political rent-seeking and the topical literature on political action in air transportation.

Suggested Citation

  • Brown, Richard S., 2016. "Lobbying, political connectedness and financial performance in the air transportation industry," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 61-69.
    • Handle: RePEc:eee:jaitra:v:54:y:2016:i:c:p:61-69
    DOI: 10.1016/j.jairtraman.2016.03.009
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    Cited by:

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    2. William Morrison, Jaap de Wit, 2017. "US Open Skies Agreements and Unlevel Playing Fields," LCERPA Working Papers 0104, Laurier Centre for Economic Research and Policy Analysis, revised 01 Aug 2017.
    3. Brown, Richard S. & Kline, William A., 2020. "Exogenous shocks and managerial preparedness: A study of U.S. airlines’ environmental scanning before the onset of the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 89(C).
    4. Morrison, William G. & de Wit, Jaap, 2019. "US open skies agreements and unlevel playing fields," Journal of Air Transport Management, Elsevier, vol. 74(C), pages 30-38.
    5. Woon Leong Lin, 2019. "Is Corporate Political Activity an Investment or Agency? An Application of System GMM Approach," Administrative Sciences, MDPI, vol. 9(1), pages 1-22, January.
    6. Woon Leong Lin, 2021. "Giving too much and paying too little? The effect of corporate social responsibility on corporate lobbying efficacy: Evidence of tax aggressiveness," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 908-924, March.
    7. Woon Leong Lin, 2018. "Do Firm’s Organisational Slacks Influence the Relationship between Corporate Lobbying and Corporate Financial Performance? More Is Not Always Better," IJFS, MDPI, vol. 7(1), pages 1-23, December.

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