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Corporate Lobbying and Financial Performance

  • Chen, Hui
  • Parsley, David
  • Yang, Ya-wen

Corporate lobbying activities are designed to influence legislators and thus to further company goals by encouraging favorable policies and/or outcomes. Using data made available by the Lobbying Disclosure Act of 1995, this study examines corporate lobbying activities from a financial perspective. We find that on average, lobbying is positively related to accounting and market measures of financial performance. These results are robust across a number of empirical specifications and continue to hold when we account for potential sample selection. We also report market performance evidence using a portfolio approach. We find that portfolios of firms with the highest lobbying intensities significantly outperform their benchmarks in the three years following portfolio formation.

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File URL: http://mpra.ub.uni-muenchen.de/21114/1/MPRA_paper_21114.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21114.

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Date of creation: Jan 2010
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Handle: RePEc:pra:mprapa:21114
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