Ethics and Corporate Lobbying

45 Pages Posted: 11 Mar 2021

See all articles by Anqi Jiao

Anqi Jiao

Southwestern University of Finance and Economics - Institute of Financial Studies

Shawn Mobbs

University of Alabama - Culverhouse College of Business Administration

Sandra Mortal

University of Alabama - Culverhouse College of Commerce & Business Administration

Date Written: August 8, 2019

Abstract

We explore the exogenous effects of the Honest Leadership and Open Government Act of 2007 (HLGOA), on U.S. corporations. We find that the average market reaction to the reform, which aimed to mitigate unethical lobbying practices, by lobbying firms is positive, implying the reform benefited these shareholders on average. We also uncover heterogeneity of lobbying firms’ response to the reform. Following the Act, firms with a history of active lobbying reduced their lobbying activity, whereas firms with little prior lobbying activity increased their lobbying efforts. Finally, we find that after the enactment of these reforms, firms that engage in active lobbying, and especially those with a good ethical reputation, are more likely to appoint politically connected directors relative to non-lobbying firms.

Keywords: corporate lobbying; ethics; politically connected directors; regulations

JEL Classification: G14, G28, G34, G38, D72

Suggested Citation

Jiao, Anqi and Mobbs, Shawn and Mortal, Sandra, Ethics and Corporate Lobbying (August 8, 2019). Available at SSRN: https://ssrn.com/abstract=3780034 or http://dx.doi.org/10.2139/ssrn.3780034

Anqi Jiao (Contact Author)

Southwestern University of Finance and Economics - Institute of Financial Studies ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Shawn Mobbs

University of Alabama - Culverhouse College of Business Administration ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

Sandra Mortal

University of Alabama - Culverhouse College of Commerce & Business Administration ( email )

Culverhouse College of Business
Tuscaloosa, AL 35487-0223
United States

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