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Corporate lobbying, political connections, and the bailout of banks

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Author Info

  • Blau, Benjamin M.
  • Brough, Tyler J.
  • Thomas, Diana W.

Abstract

Political involvement has long been shown to be a profitable investment for firms that seek favorable regulatory conditions or support in times of economic distress. But how important are different types of political involvement for the timing and magnitude of political support? To answer this question, we take a comprehensive look at the lobbying expenditures and political connections of banks that were recipients of government support under the 2008 Troubled Asset Relief Program (TARP). We find that politically-engaged firms were not only more likely to receive TARP funds, but they also received a greater amount of TARP support and received the support earlier than firms that were not politically involved.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 37 (2013)
Issue (Month): 8 ()
Pages: 3007-3017

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Handle: RePEc:eee:jbfina:v:37:y:2013:i:8:p:3007-3017

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Web page: http://www.elsevier.com/locate/jbf

Related research

Keywords: Lobbying; Corporate bailouts; Government policy; Regulation of financial institutions;

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References

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Citations

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Cited by:
  1. Hasan, Iftekhar & Jackowicz, Krzysztof & Kowalewski , Oskar & Kozlowski , Lukasz, 2014. "Politically connected firms in Poland and their access to bank financing," BOFIT Discussion Papers 2/2014, Bank of Finland, Institute for Economies in Transition.
  2. James R. Barth & Apanard Penny Prabha & Wenling Lu, 2014. "Do Interest Groups Unduly Influence Bank Regulation?," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 11(4), pages 19-25, 01.
  3. Florian Buck, 2014. "Financial Regulation and the Grabbing Hand," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 11(4), pages 03-13, 01.

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