Working Papers


Abstract: While the firms are more likely to engage in lobbying activities as consistent with their environmental stances, a substantial number of Brown firms with high carbon emissions spend their lobbying expenditures supporting politicians with pro-environment stances. I explore this puzzling behavior by identifying whether firms lobby in support of or opposition to specific policies. I overcome an empirical challenge due to data limitations related to information on lobbying direction by combining corporate lobbying reports by U.S. firms with the data on lobbyists involved in lobbying activities. I find that Brown firms support pro-environmental policies when they own more green patents. The results get stronger with the firms with larger intangible asset holdings, supporting the importance of firms’ patents in influencing their lobbying direction. Overall, this result suggests that a firm’s green technological innovation is important for determining its environmental lobbying direction, not alone the environmental stance. 


Abstract: We investigate how firms with opposing environmental stances can engage in political competition to influence policymakers' decisions through lobbying. Our theoretical model predicts that these firms end up spending more on lobbying due to political competition, especially when the climate policy uncertainty is higher. We empirically test the lobbying "tug of war" using U.S. corporate lobbying data. Importantly, excessive lobbying increases the cost of capital and decreases a firm's R&D and capital investment. Overall, our study highlights the hidden costs of intense lobbying competition among firms with polarized environmental interests.

*Media Mention : The Finreg Blog (Sponsored by Duke Financial Economics Center)


Abstract: We study the impact of politicians' personal financial interests on their economic bill proposals. Using a novel database of comprehensive financial disclosures of the Congress members in South Korea, we find that congresspeople with more real estate assets in their portfolios are less likely to propose economic bills that tighten the real estate market. To address endogeneity concerns, we use an instrumental variable of an exogenous shock to a local real estate market---an unexpected earthquake in a local city. Our findings suggest that the personal financial interests of politicians may have a material impact on the types and characteristics of economic bills proposed.

*Previously circulated under the title "Politicians' Asset Allocation and Economic Bill Proposals"