Firms, Politicians, and Capital Structure

Myers, Brett W.

doi:10.2139/ssrn.1571258

Cited by 5 publications

(2 citation statements)

References 64 publications

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“…They also report a higher return for universities that have representation on house appropriation committees. Myers (2009) provides evidence that the corporate capital structure is influenced by political connections of firms. Myers argues that while politicians may impose costs on firms to realize political benefits, they also want to make sure that those costs do not lead to firms going bankrupt.…”

Section: Operating Performancementioning

confidence: 99%

“…Further, with respect to the value relevance of corporate political strategies, Getz (1997: 64) concludes, '[While] we have a very good understanding of which firms engage in corporate political action (CPA) and their rationales for doing so … we are not certain about the effectiveness of tactics … Our least complete understandings revolve around the ways that CPA changes over time and the setting in which CPA occurs. ' Recently, while there appears to be a heightened interest among researchers in studying the value relevance of corporate political strategies [Chen et al (2010), Goldman et al (2009), Cooper et al (2010, Richter et al (2008), Hochberg et al (2007), de Figueiredo and Edwards (2007), Faccio and Parsley (2009), and Myers (2009) among others], clear and conclusive evidence is missing (Brasher and Lowery, 2006). More interestingly, finance and corporate governance scholars have yet to embrace the research on political strategies as part of the mainstream research.…”

Section: Introductionmentioning

confidence: 99%

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Corporate political strategies

Mathur

Singh

2010

Accounting &Amp; Finance

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The paper offers a comprehensive and integrative review of the current literature on corporate political strategies sharing common boundaries with finance, accounting and corporate governance. While there appears to be a heightened interest among researchers in studying the value relevance of corporate political strategies [Chen et al. among others], interestingly, finance and corporate governance scholars have yet to embrace the research on political strategies as part of their mainstream research. Taking a micro perspective at the firm level, we review the major scholarly works in the economics, finance and management disciplines with respect to the firm attributes shaping the corporate decision to engage politically, modes of corporate political participation, and the value impact of corporate political activity. The overarching theme of the review article is to integrate diverse -political economy and management -paradigms of corporate political participation and rationalize the value relevance within the corporate finance and corporate governance perspective. The paper also presents focused preliminary evidence on the determinants and value impact of corporate lobbying strategies. For the sample of 5452 firm-year observations, the results indicate that while for large firms corporate lobbying may not be agency driven and may create value, for small firms, despite low shareholder rights associating with higher lobbying engagements, lobbying still relates positively to value added.

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Section: Operating Performancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Corporate political strategies

Mathur

Singh

2010

Accounting &Amp; Finance

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Political Capital: Corporate Connections and Stock Investments in the U.S. Congress, 2004-2008

Eggers

Hainmueller

2014

QJPS

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The Role Political Connections Play in Access to Finance: Evidence from Cross-Listing

Richter

2010

SSRN Journal

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What role does political influence play in access to finance? Using a comprehensive crosscountry dataset, I characterize how and why domestic political connections affect firms' ability to access all types of finance-exploiting firms' cross-listing activity as a source of empirical identification. The results extend our understanding from recent single-country studies focused exclusively on domestic bank finance. First, political influence improves firms' access to finance beyond domestic (bank) debt markets-political connections also improve access to foreign, equity finance. Second, the mechanism through which political influence works to improve access to finance is broader than political coercion of local bankers-political connections function as a firm-level substitute for strong national property rights, reducing connected firms risk premiums vis-à-vis unconnected peers.

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Firms, Politicians, and Capital Structure

Cited by 5 publications

References 64 publications

Corporate political strategies

Corporate political strategies

Political Capital: Corporate Connections and Stock Investments in the U.S. Congress, 2004-2008

The Role Political Connections Play in Access to Finance: Evidence from Cross-Listing

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