DP16966 What Drives U.S. Corporate Elites' Campaign Contribution Behavior?

Author(s): Edoardo Teso
Publication Date: January 2022
Keyword(s): Campaign finance, Lobbying, U.S. Congress
JEL(s): D72, G38
Programme Areas: Political Economy
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16966

Do U.S. corporate elites contribute to political campaigns purely motivated by ideological considerations â?? as typically assumed by the literature on individual donors' drivers of contributions â?? or are their donations also a tool of political influence? I investigate this question using a new panel on the contributions to members of U.S. Congress (MCs) by 401,557 corporate leaders of 14,807 U.S. corporations over the 1999-2018 period. I show that donations increase by 11% when a politician is assigned to a committee dealing with policy issues relevant to a corporate leader's company. The effect is driven by donations to MCs with the greatest power in the committees. The estimates suggest that (i) 13% of the observed gap in corporate leaders' donations to policy relevant versus other MCs is driven by an influence-seeking motive, and (ii) the total corporate leaders' donations that are driven by the influence-seeking motive are about 53% of the overall donations by their companies' PACs to all MCs over the same period.