No Return From Corporate Political Activity

A new study has found that firms’ political investments are negatively associated with their market performance.

Researchers from Rice University and Long Island University investigated the relationship between corporate political activity and financial returns of 943 firms from the S&P 1500 between 1998 and 2008.

The study also found that corporate political activity worsens accounting performance and that firms that place former public officials on their boards experienced inferior market performance than firms without such board members.

However the findings did suggest that corporate political giving is positively associated with market performance in highly regulated industries.

Read more at Rice University and Long Island University