TY - JOUR
T1 - Corporate lobbying and firm performance variability
AU - Girard, Alexandre
AU - Gnabo, Jean-Yves
AU - Londoño van Rutten, Rodrigo
N1 - Publisher Copyright:
© 2023
PY - 2023/12
Y1 - 2023/12
N2 - This paper is the first to provide empirical evidence that higher lobbying expenditures are associated with higher operational performance variability. Using data from S&P1500 firms over the 2000–2020 period, our estimates indicate a positive relationship between lobbying expenditures and the variability of return on asset and return on equity. Addressing the endogeneity concerns by applying a control function approach, we find results consistent with the view that the management of lobbying firms takes riskier investment decisions.
AB - This paper is the first to provide empirical evidence that higher lobbying expenditures are associated with higher operational performance variability. Using data from S&P1500 firms over the 2000–2020 period, our estimates indicate a positive relationship between lobbying expenditures and the variability of return on asset and return on equity. Addressing the endogeneity concerns by applying a control function approach, we find results consistent with the view that the management of lobbying firms takes riskier investment decisions.
KW - Firm performance variability
KW - Firm performance volatility
KW - Lobbying
KW - Moral hazard
UR - http://www.scopus.com/inward/record.url?scp=85173470893&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2023.104524
DO - 10.1016/j.frl.2023.104524
M3 - Article
AN - SCOPUS:85173470893
SN - 1544-6123
VL - 58
JO - Finance Research Letters
JF - Finance Research Letters
M1 - 104524
ER -