 Does economic policy uncertainty drive the initiation of corporate lobbying?Longfei Shang, Ji-Chai Lin and Walid Saffar Journal of Corporate Finance, 2021, vol. 70, issue C Abstract: Economic policy uncertainty (EPU) raises firms' incentives to lobby policymakers to access policy information and influence policy outcomes. Surprisingly, we find that non-lobbying firms are less likely to initiate lobbying during periods of heightened EPU. The evidence is consistent with our time-varying barriers hypothesis that entry barriers to lobbying increase with EPU. We verify that the negative effect of EPU on lobbying initiation arises through the channels of lobbying entry expenses and returns to experience. Furthermore, lobbying entry expenses are not large, implying that the returns to experience channel is likely a more serious barrier preventing non-lobbying firms from initiating lobbying. We also find that facing high lobbying entry barriers, non-lobbying firms go for alternative political activities, such as hiring politically connected directors. Keywords: Economic policy uncertainty; Lobbying decision; Lobbying entry barriers (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:70:y:2021:i:c:s0929119921001759 DOI: 10.1016/j.jcorpfin.2021.102053 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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