Essays in political economy and finance

This dissertation empirically examines three different questions related to the political economy of the firm---linking each to financial outcomes or datasets.;In the first essay (based on work with Jeffrey Timmons and Krislert Samphantharak), we ask what the relationship is between firms' tax rates and their lobbying expenditures. We assemble a unique dataset of all US firms with publicly available financial statements and their lobbying expenditures to show firms that spend more on lobbying in a given year pay lower effective tax rates in the next year. Increasing registered lobbying expenditures by 1% appears to lower effective tax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm that lobbies.;In the second essay, I ask what role political influence plays in access to finance and how it differs across markets. Exploiting the multi-level structure of a comprehensive cross-country dataset, I characterize how and why domestic political connections affect firms' propensities to access foreign capital markets by cross-listing securities abroad. Connected firms have better access to foreign capital markets; moreover, the effect of connections is magnified for firms located in countries with weak property rights. This suggests that domestic political connections, at the firm-level, serve as a substitute for strong national property rights protections.;In the third essay, I ask whether corporate social responsibility (CSR) and corporate political activity are substitutes or complements. I assemble and analyze the largest dataset possible incorporating both types of non-market behavior. Regressing an interaction between a CSR index and a measure of lobbying intensity on Tobin's Q, allows me to test whether they play complementary roles. Higher CSR scores, more intensive lobbying, and the interaction between CSR scores and lobbying intensity all appear to increase value when comparing firms; however, when each firm is studied over time, only the interaction between CSR scores and lobbying intensity appear to increase firm value. Taken together this suggests that firms' CSR initiatives work as a complement to their political activity.