The effect of firm political capabilities on the distribution of electoral victory rents for corporate campaign donors

• Grant number: 14/07668-0
• Support Opportunities: Scholarships abroad - Research
• Start date: August 15, 2014
• End date: August 14, 2015
• Field of knowledge: Applied Social Sciences - Administration - Business Administration
• Principal Investigator: Rodrigo Bandeira de Mello
• Grantee: Rodrigo Bandeira de Mello
• Host Investigator: Fernando Daniel Hidalgo
• Host Institution: Escola de Administração de Empresas de São Paulo (EAESP). Fundação Getúlio Vargas (FGV). São Paulo , SP, Brazil
• Institution abroad: Massachusetts Institute of Technology (MIT), United States

Abstract

Empirical research on the value of corporate political connections has generally produced non-reliable estimates. Research in the political science field have recently tried to solve this problem by applying the regression discontinuity design (RDD) whose results suggest a positive election effect for donor firms that finance political campaigns. However, RDD in political science uses the candidate as the unit of analysis what impedes the investigation on how different firm level variables produce differential election effects for donor firms. In this research project, I model the RDD from the standpoint of the donor firm in order to test the hypothesis that firm political capabilities affect the distribution of electoral victory rents for donor firms. Brazil is the perfect natural laboratory to test this hypothesis since its legislation allows the direct connection between firms and candidates. Despite the fact that a new legislation is under discussion in Congress that will forbid corporate donation after 2018, the history of political connections through campaign financing in Brazil has produced longstanding effects for firm performance and strategy. The supervision of Prof. Hidalgo and his team at the MIT, which are experts in RDD and campaign financing in Brazil, will assure access to MIT resources. It is expected that the results of this project will extend contingent theory about the value of firm political connections as well as contribute in scholarly development of the graduate program of the FGV-EAESP. (AU)