The Role of Institutional Investors in Corporate Lobbying

Anqi Jiao

2019 Papers from Job Market Papers

Abstract: This study investigates whether and how institutional investors affect corporate lobbying of firms in their portfolios. I find that firmsâ lobbying activities are positively associated with ownership by institutional investors who also lobby. The effect is stronger for the firms that face more constraints to lobbying. I use the Russell index reconstitution to establish causality. I further document three plausible channels. First, institutional investors support firmsâ lobbying by pushing for the same congressional bills. Second, institutional investors share political resources such as lobbyists with firms. Third, institutional investors protect firmsâ private information by voting against proposals on additional lobbying disclosure. Overall, the study shows that institutional investors can alleviate the constraints and costs in corporate lobbying.

JEL-codes: D72 G23 G38 P16 (search for similar items in EconPapers)
Date: 2019-08-20
New Economics Papers: this item is included in nep-cdm and nep-pol
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