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Spillovers from regulating corporate campaign contributions

Author

Listed:
  • Adam Fremeth

    (University of Western Ontario)

  • Brian Kelleher Richter

    (University of Texas at Austin)

  • Brandon Schaufele

    (University of Western Ontario)

Abstract

Populist clamor and recent Supreme Court decisions have renewed calls for increased regulation of corporate money in politics. Few empirical estimates exist, however, on the implications of existing rules on firms’ political spending. Exploiting within firm-cycle cross-candidate variation and across firm-cycle variation, we demonstrate that the regulation of PAC campaign contributions generates large spillovers into other corporate political expenditures such as lobbying. Using both high dimensional fixed effects and regression discontinuity designs, we demonstrate that firms constrained by campaign contribution limits spend between $549,000 and $1.6M more on lobbying per election cycle, an amount that is more than 100 times the campaign contribution limit. These results demonstrate that, similar to regulations in other domains of the economy, constraining specific corporate political activities often yields unintended effects.

Suggested Citation

  • Adam Fremeth & Brian Kelleher Richter & Brandon Schaufele, 2018. "Spillovers from regulating corporate campaign contributions," Journal of Regulatory Economics, Springer, vol. 54(3), pages 244-265, December.
  • Handle: RePEc:kap:regeco:v:54:y:2018:i:3:d:10.1007_s11149-018-9369-7
    DOI: 10.1007/s11149-018-9369-7
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    Cited by:

    1. Artés, Joaquín & Richter, Brian Kelleher & Timmons, Jeffrey F., 2019. "The Value of Political Geography: Evidence from the Redistricting of Firms," Working Papers 291, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.

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    More about this item

    Keywords

    Campaign finance regulation; Corporate political activity; Election law;
    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
    • K39 - Law and Economics - - Other Substantive Areas of Law - - - Other

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