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Corporate lobbying, political connections, and the bailout of banks

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  • 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.

Suggested Citation

  • Blau, Benjamin M. & Brough, Tyler J. & Thomas, Diana W., 2013. "Corporate lobbying, political connections, and the bailout of banks," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 3007-3017.
    • Handle: RePEc:eee:jbfina:v:37:y:2013:i:8:p:3007-3017
    DOI: 10.1016/j.jbankfin.2013.04.005
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    References listed on IDEAS

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    More about this item

    Keywords

    Lobbying; Corporate bailouts; Government policy; Regulation of financial institutions;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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