2019
DOI: 10.1002/smj.3038
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Market reactions to non‐market strategy: Congressional testimony as an indicator of firm political influence

Abstract: Research Summary: We argue that because influence in the political arena can net benefits for firms, investors will respond favorably to indications of firm political influence. We focus on testimony before Congress because it is one of the most highly sought after and influential points of governmental access. Our findings indicate that firms reap positive abnormal returns surrounding Congressional testimony and that investors respond more favorably to aspects of testimony that indicate additional political i… Show more

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Cited by 24 publications
(13 citation statements)
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“…The need to manage the liabilities arising from the host country’s political environment coupled with financial markets’ increasing attention to MNCs’ success in mitigating those liabilities (Ridge et al , 2019), and make it essential for managers to understand the factors that will help reduce the power imbalance between the parties, as well as factors that would constrain the abuse of power by their political counterparts to extract rents.…”
Section: Discussionmentioning
confidence: 99%
“…The need to manage the liabilities arising from the host country’s political environment coupled with financial markets’ increasing attention to MNCs’ success in mitigating those liabilities (Ridge et al , 2019), and make it essential for managers to understand the factors that will help reduce the power imbalance between the parties, as well as factors that would constrain the abuse of power by their political counterparts to extract rents.…”
Section: Discussionmentioning
confidence: 99%
“…Congress divides labor by appointing members to certain committees so that those members can obtain detailed information about the regulatory landscape of an industry, create and pass legislation focused on those industries, and generally become experts regarding that industry. As Ridge et al (2019) note, the "jurisdiction of committees encourages members of each committee to develop a specialized knowledge of the committee's subject matter…and then use that knowledge to draft public policy regarding the industry over which their jurisdiction presides" (p. 1649).…”
Section: Jurisdictional Information and Influencementioning
confidence: 99%
“…Further, firms that testify at committee hearings are generally firms "with long-term and ongoing relational ties to committee members" (Ridge et al, 2019(Ridge et al, , p. 1646. This is because testimonies involve extensive coordination between the firm and the committee, including private meetings where more information is exchanged than in the public hearing itself.…”
Section: Moderating Role Of Lobbying the Senator's Legislative Propos...mentioning
confidence: 99%
“…The check of the studies in the SMJ confirms that also in 2019, multiple secondary databases are frequently combined and that the vast majority of the studies do not report in detail on the method(s) utilized to combine the data (e.g., Aggarwal 2020; Arikan, Arikan, and Shenkar 2020; Graffin et al 2020). The studies that do describe the MM show that name MMs are utilized (e.g., Cao, Gustafson, and Velthuis 2019; Hendricks, Howell, and Bingham 2019) as well as common identifiers methods (e.g., Kang and Kim 2020; Meyer-Doyle, Lee, and Helfat 2019), and fuzzy name/key word methods (e.g., Png 2019; Ridge et al 2019). The work by Png (2019) describes the development of a new data set and could be considered as a good example of describing the MM.…”
Section: Different Mmsmentioning
confidence: 99%