Tuesday, April 03, 2007


Forbes (April 16) cites a recent paper that finds links between corporate campaign contributions and favors returned. These are real favors that show up as increased asset value. See below.

I found the paper on Google scholar. It's all quite shocking.

All Follow the Money

A new academic paper suggests it pays
for public companies to give to
political campaigns. Using federal elections
records to review 800,000 donations
linked with 1,900 firms between 1984 and
2005, Michael J. Cooper, Huseyin Gulen
and Alexei V. Ovtchinnikov calculate
that political activity gave businesses a
3.6% increase in firm value. They
speculate that their findings--which they
characterized as "quite
startling"--stem from the benefits of
"politician-sponsored legislation."
The researchers write that the strongest
correlation was for contributions
to home-state candidates, races for the House
of Representatives and
Democrats. --D.F. and W.P.B.