UT professors find mixing business with politics pays off

[Celebration]

http://www.physorg.com/news/2010-11-ut-professors-business-politics.html

A study by two College of Business Administration professors at the University of Tennessee, Knoxville, found that when firms engage in corporate political activities, such as lobbying and making campaign contributions, they enjoy about 20 percent higher performance. The study, by Russell Crook and David Woehr, along with Sean Lux of the University of South Florida, entitled "Mixing Business with Politics: A Meta-Analytic Study of Corporate Political Activity," will be published in the January 2011 edition of the Journal of Management, and available online at http://jom.sagepub.com/.

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This research follows the January 2010 decision by the U.S. Supreme Court in Citizens United vs. Federal Election Commission, which overturned a long-standing ruling limiting business spending on political campaigns. According to the researchers, this arguably opens the door to even higher levels of corporate political activity. Indeed, despite the state of the U.S. economy, more money flowed to politicians during this past election cycle than ever before.

"There will be more corporate political activity because donations will be subject to less scrutiny and transparency; thus it will be more difficult to track down the source of corporate political activity," said Crook. "Given this, we think that the Supreme Court ruling means that corporations and politicians will develop closer relationships than ever before."

The authors do not speculate as to why corporate political activity leads to fatter profit margins but point to examples such as the Copyright Term Extension Act, dubbed the "Mickey Mouse Protection Act," in which Disney successfully lobbied to extend U.S. copyrights by 20 years.

[Tippy]

1. K&R....So sad...