Work

Shining a Light on Firms’ Political Connections: The Role of Dark Money

Year: 2025

Type: article

Abstract: We study the emergence of a new channel for firms’ political activity using dark money through undisclosed and unlimited contributions. After the U.S. federal court decisions in 2010, S&P 500 firms substantially increased their use of dark money. We find that dark money contributions complement political engagement through campaign contributions and lobbying. Firms disclose dark money contributions when they face heightened nondisclosure costs. Firms contributing to dark money groups benefit by receiving more procurement contracts and increased government subsidies. Our findings highlight that political connections by firms are evolving and expanding through new and largely unexplored channels. (JEL D72, D73, G38, H57)

Source: The Review of Corporate Finance Studies

DOI: 10.1093/rcfs/cfaf016

Authors: Matthew Denes, Madeline Marco Scanlon

Institutions: Carnegie Mellon University, University of South Carolina

Language: English

Topic: Political Influence and Corporate Strategies

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,028