Spillovers from regulating corporate campaign contributions

Adam Fremeth (), Brian Kelleher Richter () and Brandon Schaufele
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Adam Fremeth: University of Western Ontario
Brian Kelleher Richter: University of Texas at Austin

Journal of Regulatory Economics, 2018, vol. 54, issue 3, No 2, 244-265

Abstract: Abstract Populist clamor and recent Supreme Court decisions have renewed calls for increased regulation of corporate money in politics. Few empirical estimates exist, however, on the implications of existing rules on firms’ political spending. Exploiting within firm-cycle cross-candidate variation and across firm-cycle variation, we demonstrate that the regulation of PAC campaign contributions generates large spillovers into other corporate political expenditures such as lobbying. Using both high dimensional fixed effects and regression discontinuity designs, we demonstrate that firms constrained by campaign contribution limits spend between $549,000 and $1.6M more on lobbying per election cycle, an amount that is more than 100 times the campaign contribution limit. These results demonstrate that, similar to regulations in other domains of the economy, constraining specific corporate political activities often yields unintended effects.

Keywords: Campaign finance regulation; Corporate political activity; Election law (search for similar items in EconPapers)
JEL-codes: D72 D73 K39 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11149-018-9369-7

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