New York University
Business strategy and political outcomes: The impact of the Citizens United decision on the US states.
The last decades have seen an increase in the market power of the American corporations and their increased political activity, mainly greater spending on political campaigns. A question has emerged whether this process led to introduction of policies that might have only served interests of the firms and created negative externalities for the rest of the society. This paper utilizes the 2010 US Supreme Court decision in the Citizens United case, treating the ruling as a natural experiment on the US states. I investigate novel datasets on the pre- and post-decision policy outcomes and electoral promises of state legislators, focusing on regulatory and taxation issues that might benefit corporations: state corporate taxes and regulations of the private sector. I find that the ruling is associated with an increase in support for reduced regulation of the private sector and an increased support for maintaining the current level of corporate taxes. Further research in progress aims to determine if this is an outcome of the strategic behavior of politicians or the firmsaviors of other firms. We integrate the behavioral theory of the firm and social comparison theory in understanding how firms decide on their extent of environmental action. Our findings show a significant effect between firms with environmental damage greater than their peers and their subsequent corporate environmental spending. We also find support that firms with superior environmental performance relative to their peers will engage in subsequent corporate cooperative behaviors. In addition, we found support that the extent of comparison that a firm engages in is a boundary condition for these relationships.
Hanna Niczyporuk is a Ph.D. candidate at New York University. She specializes in political economy, with a particular focus on interactions between business and politics, non-market strategy of firms and corporate social responsibility. Hanna holds a Master in Economics from Barcelona Graduate School of Economics and a BA in Economics from University College London. Before starting graduate school, Hanna worked on investment and regulatory issues for PwC, the European Bank for Reconstruction and Development and the UK Government Economic Service.