TY - JOUR
T1 - Institutional ownership monitoring and corporate political activity: Governance implications
AU - Hadani, Michael
PY - 2012/1/1
Y1 - 2012/1/1
N2 - Corporate political activity (CPA) represents a strategy whereby firms attempt to influence government policymaking, to advance their strategic goals; firm owners may benefit from it. However, other research indicates that CPA is uncertain and increases information asymmetries between owners and managers. Hence, this study avoids the assumption that owners and managers have similar views regarding CPA and focuses on the relationship between institutional investors, large investors' ownership and investors' portfolio characteristics on firm CPA. The results reveal that institutional ownership is associated with reduced CPA among S&P 500 firms across five election cycles, but that investors' portfolio concentration is associated with increased CPA. The implications of these findings are discussed.
AB - Corporate political activity (CPA) represents a strategy whereby firms attempt to influence government policymaking, to advance their strategic goals; firm owners may benefit from it. However, other research indicates that CPA is uncertain and increases information asymmetries between owners and managers. Hence, this study avoids the assumption that owners and managers have similar views regarding CPA and focuses on the relationship between institutional investors, large investors' ownership and investors' portfolio characteristics on firm CPA. The results reveal that institutional ownership is associated with reduced CPA among S&P 500 firms across five election cycles, but that investors' portfolio concentration is associated with increased CPA. The implications of these findings are discussed.
KW - Institutional ownership
KW - Corporate political activity
KW - Agency theory
KW - Lobbying
UR - https://digitalcommons.stmarys-ca.edu/school-economics-business-faculty-works/242
UR - https://doi.org/10.1016/j.jbusres.2011.05.003
U2 - 10.1016/j.jbusres.2011.05.003
DO - 10.1016/j.jbusres.2011.05.003
M3 - Article
VL - 65
JO - Journal of Business Research
JF - Journal of Business Research
ER -