Business Publications
Document Type
Book Chapter
Publication Date
2015
Volume
34
Journal
Strategy Beyond Markets (Advances in Strategic Management, Vol. 34)
First Page
161
URL with Digital Object Identifier
https://doi.org/10.1108/S0742-332220160000034006
Last Page
191
Abstract
Campaign contributions are typically seen as a strategic investment for firms; recent empirical evidence, however, has shown few connections between firms’ contributions and regulatory or performance improvements, prompting researchers to explore agency-based explanations for corporate politics. By studying intrafirm campaign contributions of CEOs and political action committees (PACs), we investigate two hypotheses related to public politics and demonstrate that strategic and agency-based motivations may hold simultaneously. Exploiting transaction-level data, with over 6.8 million observations, we show that (i) when PACs give to specific candidates, executives give to the same candidates, especially those who are strategically important to the firm; and (ii) when executives give to candidates who are not strategically important, PACs give to the same candidates potentially due to agency problems within the firm.
Notes
This is the authors' version of the chapter published as: Fremeth, A., Richter, B.K. and Schaufele, B. (2016), "Motivations for Corporate Political Activity", Strategy Beyond Markets (Advances in Strategic Management, Vol. 34), Emerald Group Publishing Limited, Leeds, pp. 161-191. https://doi.org/10.1108/S0742-332220160000034006