|Kelley associate professor of finance Eitan Goldman accepts the ECGI 2015 Standard Life Investments Finance Prize for the paper he co-authored with Nandini Gupta and Alexander Borisov.|
Two Kelley School of Business professors and a Kelley finance alumnus earned first prize for best finance paper in the European Corporate Governance Institute’s 2015 Working Paper Competition.
The paper, The Corporate Value of (Corrupt) Lobbying, was written by Eitan Goldman, associate professor of finance and FedEx Faculty Fellow; Nandini Gupta, associate professor of finance and Koenig Faculty Fellow; and Alexander Borisov, PhD’12, assistant professor of finance at the University of Cincinnati. It was recently accepted for publication in the Review of Financial Studies.
Winner of the 2015 Standard Life Investments Finance Prize, the paper investigates how shareholders of the largest U.S. companies are affected by corporate lobbying activity.
“We use stock market data to study how stock prices of firms that lobby respond to events which decrease the ability of firms to lobby in the future,” Goldman says. “Our first main finding is that we are able to quantify the corporate value of lobbying. For example, we find that a $100,000 additional lobbying expenditure is associated with an additional shareholder value of about $1.2 million. The second main finding of the paper is to show that part of the corporate value of lobbying can be attributed to potentially unethical arrangements between firms and policymakers.”
The trio worked on the paper for several years. Receiving the award recognized the team’s time, effort and ideas, Goldman says.
“It’s gratifying to see that other leading academics and practitioners interested in corporate governance issues view the paper as important.”