Research

What economists and finance scholars have learned from lobbying data about markets, firms and regulators, with links to every paper, and our own findings.

Main Reading Room, Library of Congress, Washington, D.C.
Main Reading Room, Library of Congress. Photo: Carol M. Highsmith, Library of Congress.
56–93 bps

The monthly margin by which hedge funds with ties to lobbyists beat the market on politically sensitive holdings.

Gao and Huang, Journal of Financial Economics, 2016.

29%

The rise in a bill’s chance of passing for each additional $1m spent lobbying on it.

LobbyingData.com analysis; 2.5M filings, 81,000 bills.

$3.26

In government contracts won for every dollar spent on lobbying during the pandemic stimulus.

LobbyingData.com analysis; Heckman selection model.

Research library

29 studies of lobbying and markets, most of them peer-reviewed. Most draw on the same disclosures that make up this dataset, so their findings can be tested, and taken further, with it. The summaries are ours; each title links to the original paper.

Lobbying, stock returns and firm value

Gao and Huang (2016)Journal of Financial Economics 121(3)
Capitalizing on Capitol Hill: Informed trading by hedge fund managers

Hedge funds connected to lobbyists outperformed passive benchmarks by 56 to 93 basis points a month on politically sensitive holdings from 1999 to 2012. The advantage faded after the 2012 STOCK Act.

Borisov, Goldman and Gupta (2016)Review of Financial Studies 29(4)
The corporate value of (corrupt) lobbying

Around Jack Abramoff's 2006 guilty plea, which constrained lobbying, firms that lobbied more lost more market value, indicating that investors price lobbying as value-creating.

Chen, Parsley and Yang (2015)Journal of Business Finance & Accounting 42(3–4)
Corporate lobbying and firm performance

Lobbying is positively related to accounting measures of performance and to market measures of financial performance.

Hill, Kelly, Lockhart and Van Ness (2013)Financial Management 42(4)
Determinants and effects of corporate lobbying

Controlling for PAC contributions, shareholders value lobbying undertaken on their behalf, particularly at firms without a contributing PAC.

Hochberg, Sapienza and Vissing-Jørgensen (2009)Journal of Accounting Research 47(2)
A lobbying approach to evaluating the Sarbanes-Oxley Act of 2002

Firms whose insiders lobbied against strict SOX disclosure rules earned roughly 7% higher cumulative returns in the months before passage, using lobbying to identify the firms most affected by a law.

Cao, Fernando, Tripathy and Upadhyay (2018)Journal of Corporate Finance 50
The economics of corporate lobbying

The benefits of lobbying are concentrated among firms whose political alignment matches the party in power.

Unsal, Hassan and Zirek (2016)Journal of Corporate Finance 38
Corporate lobbying, CEO political ideology and firm performance

The relationship between lobbying and firm value, including post-lobbying abnormal returns, varies with the political orientation of the firm's managers.

Returns to lobbying: policy, funding and contracts

Kang (2016)Review of Economic Studies 83(1)
Policy influence and private returns from lobbying in the energy sector

Across 538 energy policies, lobbying moves the probability of enactment only slightly, but estimated average returns to the lobbying firms exceed 130%.

de Figueiredo and Silverman (2006)Journal of Law and Economics 49(2)
Academic earmarks and the returns to lobbying

Universities represented on appropriations committees earn substantial returns on lobbying for earmarks; those without representation earn little.

Ridge, Ingram and Hill (2017)Academy of Management Journal 60(3)
Beyond lobbying expenditures: How lobbying breadth and political connectedness affect firm outcomes

Lobbying a broader set of government targets improves contract awards and performance up to a point of diminishing returns, with political connectedness moderating the effect.

Adelino and Dinc (2014)Journal of Financial Economics 114(2)
Corporate distress and lobbying: Evidence from the Stimulus Act

Financially weaker firms, measured by CDS spreads, lobbied more around the 2009 Stimulus Act, and lobbying was associated with a higher likelihood of receiving stimulus funds.

Duchin and Sosyura (2012)Journal of Financial Economics 106(1)
The politics of government investment

Banks' lobbying and political connections were associated with receiving capital under TARP's Capital Purchase Program, especially among weaker banks.

Blau, Brough and Thomas (2013)Journal of Banking & Finance 37(8)
Corporate lobbying, political connections, and the bailout of banks

Banks that lobbied and had political connections were more likely to receive TARP support.

Risk, regulation and enforcement

Hassan, Hollander, van Lent and Tahoun (2019)Quarterly Journal of Economics 134(4)
Firm-level political risk: Measurement and effects

Firms that discuss a political topic more on earnings calls cut hiring and investment and increase lobbying on that topic in the following quarter.

Igan, Mishra and Tressel (2012)NBER Macroeconomics Annual 26
A fistful of dollars: Lobbying and the financial crisis

Lenders that lobbied more on mortgage and securitization issues took more risk before 2008, had higher delinquencies in the crisis and were more likely to be bailed out.

Igan and Mishra (2014)Journal of Law and Economics 57(4)
Wall Street, Capitol Hill, and K Street: Political influence and financial regulation

Financial-industry lobbying, and connections between lobbyists and legislators, are associated with legislators shifting toward deregulation from 1999 to 2006.

Lambert (2019)Management Science 65(6)
Lobbying on regulatory enforcement actions: Evidence from U.S. commercial and savings banks

Banks that lobby are less likely to face severe enforcement actions from their regulators, consistent with regulatory capture.

Yu and Yu (2011)Journal of Financial and Quantitative Analysis 46(6)
Corporate lobbying and fraud detection

Firms that lobby are detected for fraud later and are less likely to be caught by regulators; fraudulent firms spend more on lobbying, particularly during the fraud period.

Correia (2014)Journal of Accounting and Economics 57(2–3)
Political connections and SEC enforcement

Firms with long-term political connections through contributions and lobbying are less likely to face SEC enforcement and receive lower penalties; lobbying the SEC directly is most effective.

Lobbyists and the lobbying process

Blanes i Vidal, Draca and Fons-Rosen (2012)American Economic Review 102(7)
Revolving door lobbyists

Lobbyists who previously worked for a U.S. senator lose about 24% of their revenue when that senator leaves office, evidence that connections are a large part of what lobbyists sell.

Bertrand, Bombardini and Trebbi (2014)American Economic Review 104(12)
Is it whom you know or what you know? An empirical assessment of the lobbying process

Lobbyists tend to follow the legislators they are connected to across committee assignments, indicating that access matters alongside issue expertise.

Bertrand, Bombardini, Fisman and Trebbi (2020)American Economic Review 110(7)
Tax-exempt lobbying: Corporate philanthropy as a tool for political influence

Corporate foundations' giving to charities in a district rises when its representative joins committees relevant to the firm; the authors estimate about 6.3% of corporate giving is politically motivated.

Kerr, Lincoln and Mishra (2014)American Economic Journal: Economic Policy 6(4)
The dynamics of firm lobbying

Few firms lobby, lobbying rises with firm size and is highly persistent from year to year, consistent with significant up-front costs of entering the political process.

Kim (2017)American Political Science Review 111(1)
Political cleavages within industry: Firm-level lobbying for trade liberalization

Using firm-level LDA reports, much of the variation in trade lobbying and tariffs occurs within industries, driven by product differentiation between firms.

Working papers

Hutchens, Rego and Sheneman (2016)SSRN working paper
Influencing profits: The differential impact of lobbying on corporate stock returns

Abnormal stock returns rise with lobbying spending, with the largest gains from lobbying on tax, defense, trade and budget issues.

Pan (2020)SSRN working paper
Corporate lobbying over business cycles

Firms lobby more during recessions, newcomers are more likely to start, and lobbying firms are more likely to receive federal subsidies.

Related research: political contributions, legislation and returns

Cohen, Diether and Malloy (2013)Journal of Financial Economics 110(3)
Legislating stock prices

Votes by legislators with concentrated interests in an industry predict its future returns; a long-short portfolio earns over 90 basis points a month after passage.

Cooper, Gulen and Ovtchinnikov (2010)Journal of Finance 65(2)
Corporate political contributions and stock returns

The number of candidates a firm supports through PAC contributions positively predicts future abnormal returns, after controlling for size, book-to-market and momentum.

Christensen, Mikhail, Walther and Wellman (2017)The Accounting Review 92(3)
From K Street to Wall Street: Political connections and stock recommendations

Politically connected brokerages issue more, and more profitable, recommendations around policy events, consistent with obtaining value-relevant information through connections.

LobbyingData.com analysis

Bill passage2.5M filings, 81,000 bills, 107th–117th Congress

Across 81,000 bills, each additional $1m spent lobbying on a bill is associated with a 29% higher chance that it passes, after allowing for the Congress in session and which party controls it.

Method. Estimated across all bills from the 107th to 117th Congress; the figure is an average association.

Contract awardsQ2 2020 to Q4 2021

During the pandemic stimulus, firms won an estimated $3.26 in government funding and contracts for every dollar spent on lobbying. Those that lobbied before the money was allocated did markedly better.

Method. Heckman selection model with firm and contract fixed effects, Q2 2020 to Q4 2021.

Why lobbying data is underused

Turning lobbying disclosures into investment data means reconciling decades of company names, matching tickers year by year and structuring every filing. Few funds have built that capability in-house.

Lobbying data also falls outside the categories most funds already buy, such as card spending, web traffic and location data, so few competitors are using it.

Teams that want to test these findings on their own holdings can start with a sample.

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