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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Return on political investment in the American Jobs Creation Act of 2004 |
| Organization Unit | |
| Authors |
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| Language |
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| Institution | Harvard Business School |
| Series Name | Harvard Business School Accounting & Management Unit Research Paper Series |
| Number | 50 |
| Number of Pages | 50 |
| Date | 2014 |
| Abstract Text | Prior literature raises a “puzzle” of high rates of return on corporate political investment, but evidence for this puzzle is largely descriptive in nature. We exploit the setting of the American Jobs Creation Act’s passage in 2004 to provide more robust estimates of political returns based on instrumentation in a two-stage regression model. We find for the median sample firm that an increase of $1 million in lobbying spending is associated with about $32.35 million in taxes saved. These estimates, while consistent with a high-returns “puzzle,” are nearly an order of magnitude lower than those previously reported via descriptive methods. |
| Free access at | DOI |
| Digital Object Identifier | 10.2139/ssrn.2537079 |
| Other Identification Number | merlin-id:11804 |
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