American corporate political strategy by revealed preference

Abstract

This thesis explores corporate political activity as a bundle of economic goods by analyzing heterogeneity between industries’ spending on lobbying, PAC contributions, and the appointment of former political officials to a corporate board of directors. By using hand-collected data on political connections of board members, and years of lobbying and PAC expenses, this paper reveals the sector-specific preferences of the firms within the S&P 500 as of Spring 2021. The analysis shows clear differences between the nonmarket strategies of each industry, signaled by whether or not the industry views the three methods of political engagement as complementary of substitute goods. This tactical selection suggests diverse motivations and goals between sectors and solidifies the theory that firms (and the executives that lead them) perceive corporate political activity as strategically apt.