Does a company’s political power affect its success in obtaining federal contracts?
A study published in Contemporary Economic Policy investigated the extent to which the companies’ political investments influence their success in the competition for federal contracts.
The study, which analyzed information on S&P 1500 firms from 1999 to 2019 available from several different databases, revealed a positive relation between a firm’s political power and the number of contracts awarded, the size of the contracts, and the favorableness of the contract terms. Interestingly, engagement with local politicians, who have incentives to support employers in their districts, was more useful to firms than engagement with national politicians when seeking to secure federal contracts.
The research also showed that companies strategically shift political donations toward more electable politicians when their influence declines.
“At a time of growing public concern about money in politics, these insights offer a timely, evidence‑based look at how political relationships shape federal contracting and corporate behavior,” said corresponding author Stephen P. Ferris, PhD, of the University of North Texas.
URL upon publication: https://onlinelibrary.wiley.com/doi/10.1111/coep.70032
Additional Information
NOTE: The information contained in this release is protected by copyright. Please include journal attribution in all coverage. For more information or to obtain a PDF of any study, please contact: Sara Henning-Stout, newsroom@wiley.com.
About the Journal
First published in 1982, Contemporary Economic Policy publishes scholarly research and analysis on important policy issues facing society. The journal provides insight into the complexity of policy decisions and communicates evidence-based solutions in a form accessible to economists and policy makers. Contemporary Economic Policy provides a forum for debate by enhancing our understanding of key issues and methods used for policy analysis.
About Wiley
Wiley is a global leader in authoritative content and research intelligence for the advancement of scientific discovery, innovation, and learning. With more than 200 years at the center of the scholarly ecosystem, Wiley combines trusted publishing heritage with AI-powered platforms to transform how knowledge is discovered, accessed, and applied. From individual researchers and students to Fortune 500 R&D teams, Wiley enables the transformation of scientific breakthroughs into real-world impact. From knowledge to impact—Wiley is redefining what's possible in science and learning. Visit us at Wiley.com and Investors.Wiley.com. Follow us on Facebook, X, LinkedIn and Instagram.
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The study, which analyzed information on S&P 1500 firms from 1999 to 2019 available from several different databases, revealed a positive relation between a firm’s political power and the number of contracts awarded, the size of the contracts, and the favorableness of the contract terms. Interestingly, engagement with local politicians, who have incentives to support employers in their districts, was more useful to firms than engagement with national politicians when seeking to secure federal contracts.
The research also showed that companies strategically shift political donations toward more electable politicians when their influence declines.
“At a time of growing public concern about money in politics, these insights offer a timely, evidence‑based look at how political relationships shape federal contracting and corporate behavior,” said corresponding author Stephen P. Ferris, PhD, of the University of North Texas.
URL upon publication: https://onlinelibrary.wiley.com/doi/10.1111/coep.70032
Additional Information
NOTE: The information contained in this release is protected by copyright. Please include journal attribution in all coverage. For more information or to obtain a PDF of any study, please contact: Sara Henning-Stout, newsroom@wiley.com.
About the Journal
First published in 1982, Contemporary Economic Policy publishes scholarly research and analysis on important policy issues facing society. The journal provides insight into the complexity of policy decisions and communicates evidence-based solutions in a form accessible to economists and policy makers. Contemporary Economic Policy provides a forum for debate by enhancing our understanding of key issues and methods used for policy analysis.
About Wiley
Wiley is a global leader in authoritative content and research intelligence for the advancement of scientific discovery, innovation, and learning. With more than 200 years at the center of the scholarly ecosystem, Wiley combines trusted publishing heritage with AI-powered platforms to transform how knowledge is discovered, accessed, and applied. From individual researchers and students to Fortune 500 R&D teams, Wiley enables the transformation of scientific breakthroughs into real-world impact. From knowledge to impact—Wiley is redefining what's possible in science and learning. Visit us at Wiley.com and Investors.Wiley.com. Follow us on Facebook, X, LinkedIn and Instagram.
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