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
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