Political Economy Workshop (Gov 3007)

Date: 

Monday, November 30, 2015, 12:00pm to 2:00pm

Location: 

CGIS Knafel K354
Edoardo Teso presents. Abstract for "What Drives Corporate Elites’ Contribution Behavior? Evidence from Directors of U.S. Public Firms" Members of the corporate elites are among the most important individual donors to political campaigns. As a consequence, a substantial share of campaign money comes from a group of donors who is potentially interested both in supporting candidates on the basis of purely ideological considerations and in ensuring that their firms have access to relevant legislators. In this paper, I investigate the motives that drive the contribution behavior of the corporate elites using an original dataset covering all the campaign contributions made by 24,758 corporate directors of U.S. public firms in the 2000-2012 period, including donations made in periods without a board appointment. Focusing on Congressional races, I show that corporate directors have patterns of contributions that are different from those of standard individual donors, directing larger shares of their donations to politicians with a greater ability to deliver benefits to a director’s firm. In order to disentangle personal traits that directly influence directors’ contribution behavior from attempts to gain access to legislators, I leverage the panel nature of my dataset and look at within-individual variation across election cycles. I find that becoming a corporate director leads to an increase in the amount contributed that is mostly directed towards incumbents, candidates who will end up winning the election, and members of Congressional committees that have oversight over the director’s industry. Taken together, these results are consistent with corporate elites’ contribution behavior being at least partly motivated by the desire to seek access to and influence policymakers.