 Personal financial incentives, corporate governance, and firms’ campaign contributionsViktar Fedaseyeu and Lev Lvovskiy Journal of Corporate Finance, 2025, vol. 91, issue C Abstract: We find that corporate governance and executives’ personal financial incentives are important determinants of firms’ ability to extract benefits from political participation. Firms with more independent boards are more likely to establish corporate political action committees (PACs), and executives in such firms exhibit a stronger sensitivity of campaign contributions to their personal equity stakes. We also show that disperse ownership limits PACs’ ability to raise funds because even large firm-level benefits from political participation may become insignificant for individuals with small equity stakes. This may help explain why aggregate PAC contributions remain relatively small compared to the large firm-value benefits such contributions can provide. However, the negative effect of disperse ownership on political donations is mitigated by corporate governance, as well-governed firms are able to better align their managers’ incentives with the benefits from corporate political participation. Keywords: Political contributions; Corporate governance; Individual financial incentives; Corporate PACs; Corporate political influence (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:91:y:2025:i:c:s092911992400186x DOI: 10.1016/j.jcorpfin.2024.102724 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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