Corporate lobbying activities are designed to influence legislators, regulators, and courts, presumably to encourage favorable policies and/or outcomes. In dollar terms, corporate lobbying expenditures are typically one or even two orders of magnitude larger than spending by Political Action Committees (PAC), and unlike PAC donations, lobbying amounts are direct corporate expenditures. We use data made available by the Lobbying Disclosure Act of 1995, to examine this more pervasive form of corporate political activity. We find that on average, lobbying is positively related to accounting and market measures of financial performance. These results are robust across a number of empirical specifications. We also report market performance evidence using a portfolio approach. We find that portfolios of firms with the highest lobbying intensities significantly outperform their benchmarks in the three years following portfolio formation. JEL Classification code: G31, G38, D22

and Wharton. Roussanov acknowledges support from the Rodney White Center for Financial Research and the Cynthia and Bennett Golub Endowed Faculty Scholarship at Wharton. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

We build a dynamic capital structure model to study the link between systematic risk exposure and debt maturity, as well as their joint impact on the term structure of credit spreads. Our model allows for time variation and lumpiness in the maturity structure. Relative to short-term debt, long-term debt is less prone to rollover risks, but its illiquidity raises the costs of financing. The risk premium embedded in the bankruptcy costs causes firms with high systematic risk to favour longer debt maturity, as well as a more stable maturity structure over the business cycle. Pro-cyclical debt maturity amplifies the impact of aggregate shocks on the term structure of credit spreads, especially for firms with high leverage or high beta, and for firms with a large amount of long-term debt maturing when the aggregate shock arrives. However, endogenous maturity choice can also reduce and even reverse the effect of rollover risk on credit spreads. We provide empirical evidence for the model predictions on both debt maturity and credit spreads. JEL classification: G32, G33 Bank classification: Asset pricing; Debt managementRésumé À l'aide d'un modèle dynamique de la structure de capital, les auteurs étudient le lien entre l'exposition des entreprises au risque systématique et l'échéance de leur dette, ainsi que les incidences conjointes de ces deux facteurs sur la structure par terme des écarts de crédit. Dans leur modèle, la structure des échéances peut varier dans le temps et être irrégulière. Les obligations à long terme sont moins sensibles au risque de refinancement que les titres à court terme, mais leur illiquidité a pour effet d'alourdir les coûts d'emprunt. La prime de risque intégrée aux coûts de faillite amène les firmes très exposées au risque systématique à préférer une dette à plus long terme et une structure des échéances plus stable sur le cycle économique. La procyclicité des échéances amplifie les répercussions des chocs globaux sur la structure par terme des écarts de crédit, surtout dans le cas des entreprises fortement endettées ou dont les titres affichent un bêta élevé et de celles qui ont un volume considérable d'obligations à long terme échéant au moment du choc global. Cependant, le choix endogène de l'échéance peut également atténuer, voire inverser, les effets du risque de refinancement sur les écarts de crédit. Les auteurs testent empiriquement la validité des prévisions de leur modèle concernant l'échéance de la dette et les écarts de crédit.