Using an event study, we examine whether the stock market considers corporate lobbying to be a value-enhancing investment. On January 3, 2006, lobbyist Jack Abramoff pleaded guilty to bribing politicians, which generated intense scrutiny of lobbyists, limiting their political influence.
Using this event as a negative exogenous shock to the ability of firms to lobby, we show that a firm that spends $100,000 more on lobbying in the three years prior to 2006, experiences a loss of about $1.3 million in value around the guilty plea. We also find suggestive evidence that part of the value from lobbying arises from potentially unethical practices.
The fall of fascism in Italy in 1943-1944 was followed by the issuance of laws and decrees that made former fascist politicians ineligible for political...
We study the effect of firm-level political risk on wage theft. On one hand firms exposed to political risk might engage in wage theft to lower their...
Only rarely does the United States Supreme Court hear a case with fundamental implications for corporate law. In Carney v. Adams, however, the Supreme...