Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations
Alexander, Raquel Meyer Mazza, Stephen W. Scholz, Susan
Alexander, Raquel Meyer
Mazza, Stephen W.
Scholz, Susan
Citations
Altmetric:
Abstract
In this paper we use audited corporate tax disclosures relating to a tax holiday on repatriated earnings created by the American Jobs Creation Act of 2004 to examine the return on lobbying. We find firms lobbying for this provision have a return in excess of $220 for every $1 spent on lobbying, or 22,000%. Repatriating firms are more profitable overall, but surprisingly, profitability is not a predictor of repatriation amount. Rather, industry and firm size are most predictive of repatriation. Cash on hand, a proxy for ability to repatriate, is not associated with the repatriation decision or the repatriation amount. This paper provides compelling evidence that lobbying expenditures have a positive and significant return on investment.
Description
Full-text available at SSRN. See link in this record.
Date
2009
Journal Title
Journal ISSN
Volume Title
Publisher
University of Virginia School of Law
Collections
Research Projects
Organizational Units
Journal Issue
Keywords
Multinational firms, Corporate taxation, Repatriation, Lobbying
Citation
Raquel Meyer Alexander, Stephen W. Mazza & Susan Scholz, Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations, 25 J. L. & POL. 401 (2009).