Name
Politics to People: Establishment-Level Evidence on Non-Market Responses to Regulatory Risk
Date & Time
Tuesday, July 7, 2026, 12:20 PM - 12:45 PM
Description
Firms strengthen local stakeholder relations as a flexible substitute for political connections to manage regulatory risk. Exploiting local political connection losses following close congressional elections, we document a within-firm redistribution of discretionary resources towards employee-focused organizations in communities exposed to high workplace-related regulatory risk. These effects are concentrated in financially constrained firms for whom compliance is more challenging and in firms that do not hedge or re-establish political insurance. Shifting funds from politics to people affects real outcomes, highlighting the importance of optimizing resources across intangible production factors for performance.
Speakers
Session Chair
Dr Sandip Dhole, Monash University
Discussant
Mr Haowei (Harvey) Ruan, The University of Queensland
Keywords
political connections, non-market mechanisms, regulatory risk, corporate philanthropy, corporate misconduct, labor law enforcement
Theme
CSR
Author 1
Emdad Islam
Author 2
Lubna Rahman
Author 3
Cara Vansteenkiste