Institutional ownership monitoring and corporate political activity: Governance implications

Michael Hadani

Journal of Business Research, 2012, vol. 65, issue 7, 944-950

Abstract: Corporate political activity (CPA) represents a strategy whereby firms attempt to influence government policymaking, to advance their strategic goals; firm owners may benefit from it. However, other research indicates that CPA is uncertain and increases information asymmetries between owners and managers. Hence, this study avoids the assumption that owners and managers have similar views regarding CPA and focuses on the relationship between institutional investors, large investors' ownership and investors' portfolio characteristics on firm CPA. The results reveal that institutional ownership is associated with reduced CPA among S&P 500 firms across five election cycles, but that investors' portfolio concentration is associated with increased CPA. The implications of these findings are discussed.

Keywords: Institutional ownership; Corporate political activity; Agency theory; Lobbying (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296311001378
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:65:y:2012:i:7:p:944-950

DOI: 10.1016/j.jbusres.2011.05.003

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().