Political Alignment between Firms and Employees in the United States: Evidence from a new Dataset, conditional accept, Political Science Research and Methods
- Abstract: I construct a novel measure of partisan alignment between firms and employees. This measure is constructed using data matching 1,691,790 US federal campaign contribution filings of 85,109 individuals to the donations of 874 Political Action Committees (PACs) of publicly listed US companies between 2003 and 2016. The alignment measure shows that employee and employer contributions are highly correlated. Furthermore, firm- and occupation-level factors are significantly associated with firm-employee alignment. Uniquely, these new data can be easily linked to external data on industries, firms, and occupations and consequently allow for in-depth analysis of precisely how companies can influence employees’ politics.
Political Alignment between Firms and Employees: Investment or Ideology?, work in progress, Download
- Abstract: Are individual campaign donations expression of ideology or investments in expectation of future political returns? Despite the importance of employment for individual’s livelihoods, little attention has been given to how the workplace impacts employees’ political contributions. I investigate firm-employee alignment on political candidates using donations to U.S. Members of Congress from employees and Political Action Committees (PACs) of 12,737 public companies between 2003 and 2018. Overall, 16.7% of employee donations go to political candidates supported by one’s employer. Leveraging variation within firm-politician donations to House and Senate legislators over time, I find that employees contribute 17.4% more dollars to company-supported candidates, on average. Employees and employers are more likely to align on more powerful and ideologically moderate politicians who are important for regulating one’s industry. Moreover, using a difference-in-difference design, I show that executives and government relations officers change the partisanship of their contributions after sudden changes in their PAC’s partisan donations, suggesting that these individual changes are consistent with investment motives. These results qualify the common perception of individual donations to be based on ideology.
Political Alignment between Firms and Employees: The Role of Asset Specificity, work in progress, Download
- Abstract: When do political preferences of employees align with those of their employers? Comparative and International Political Economy scholars debate whether sectors, firms, or occupations matter more for preference formation, highlighting the importance of asset specificity. While some empirical work confirms the impact of sectoral and firm specificity, others focus on occupational skill specificity. I investigate the impact of specificity on alignment using new data linking 1,691,790 campaign contributions by 85,109 employees to 874 corporate Political Action Committees between 2003 and 2016. I find that firm and sectoral specificity is associated with higher partisan alignment between firms and employees, but no evidence for the impact of occupational skill specificity. I also find that employees donate more to firm-supported candidates, which is driven by candidates likely to yield political returns. The results have implications for research on coalition formation, preference formation, and highlight differences between motivations for stated preferences and political actions
Political Uncertainty and Trade in Intermediate and Capital Goods: Evidence From Ukrainian Firms, with Oleksandr Shepotylo, under review
- Abstract: We explore the effects of policy uncertainty on firm-level trade and introduce a new method to measure uncertainty using machine learning tools for quantitative text analysis. We extend a model with heterogeneous firms and sunk investments by adding intermediate inputs to derive hypotheses about the impact of trade policy uncertainty (TPU) on firm’s decision to import intermediate and capital goods. We look at Ukraine’s trade relations with EU and Russia to measure TPU and test predictions of our model. Ukrainian firms faced considerable uncertainty with regards to two mutually exclusive trade policies: the conclusion of a free trade agreement with the European Union (EU FTA) or a customs union with Russia (RU CU). Using unique firm-product-destination level data from Ukrainian manufacturing firms between 2003 and 2014, we find a substantive increase in firm-level exports to and imports from EU countries, once uncertainty with regards to the EU FTA is reduced. In line with our expectations, more protected goods, intermediates, and capital goods respond stronger to the reduction in TPU. The novel measure of uncertainty can be easily applied to other cases where governments face multiple mutually exclusive policy options.
Strategic Complementarities between Campaign Donations and Lobbying, with In Song Kim and Lukas Wolters, work in progress
- Abstract: Although campaign donations are widely considered as integral to gaining and maintaining access to legislators, scholars sharply disagree on when interest groups target politicians and whether such political investments indeed change subsequent legislative behaviour. We offer extensive empirical evidence for direct causal relationships between campaign donations made by special interest groups and (1) their subsequent lobbying activities as well as (2) legislative activities of the U.S. Representatives and Senators who received campaign donations from them. We leverage more than 75 million lobbying reports and campaign contribution filings since 1999, merged at the level of the special interest groups and legislators. To estimate the causal effect of campaign donations on legislative activities, we use the difference-in-differences estimator combined with matching methods for panel data, by comparing interest groups who make a first-time donation to a politician against a set of comparable firms with an identical donation history with no donation to the specific politician. We find that first-time donations result in an 11% increase in the probability that the targeted politician introduces legislation that is lobbied by the donating firm. Furthermore, we find that the effects are highly transient in that the strategic links between campaign donations and lobbying are concentrated only within a narrow concurrent time period. Our findings challenge the common perception of campaign donations as a long-term investment adopted by special interest groups to influence policy-making in U.S. legislative politic.