IBS Lunchtime Research Seminar - Political Insurance. Lobbying Behaviour of UK-Listed Firms.

You are cordially invited to attend an IBS lunchtime research seminar by Dr Eduardo Ibarra-Olivio Henley Business School. Please join us in Room 108, Henley Business School. If you have not received the email invite please email Angie Clark.

Please make sure you let me know in advance if you intend to attend in person so that the correct amount of catering is booked.

Title: IBS Lunchtime Research Seminar - Political Insurance. Lobbying Behaviour of UK-Listed Firms.

Date: Wednesday 3rd May 2023

Time: 13.00 – 14.15pm

Teams – A Teams link to the seminar is included for those who cannot attend in person, however attendance in person is preferred.

Abstract:

The paper studies how the degree of firms disclosed political risk varies with the intensity of lobbying activities. Beyond the traditional rent-seeking benefits, lobbying can also overcome informational asymmetry between firms and policymakers, which enables them to mitigate their exposure to political risk. The paper uses the lobbying data of UK-listed firms and their disclosed political risk through quarterly conference call reports and shows that lobbying reduces firm-level political risk. To unlock the information advantage mechanism, the paper argues that the benefits of lobbying depend on the type of firm level.

risk. The results document that lobbying is not an effective tool to mitigate the risk coming from non-political sources. Also, lobbying can reduce firms’ exposure to any political risk, but its effectiveness depends on the political risk type. The risk coming from economic policies, i.e., trade policy, that is not fully managed by the government, and there is not much information transfer between firms and policymakers, are difficult to mitigate. Lastly, the value of lobbying is larger during periods of high economic policy uncertainty when the demand for policy information is high. Our results are robust in different specifications and various sub-sample analyses.

Keywords: Political risk, Uncertainty, Lobbying, UK

JEL codes: D8, E32, G18, G38, H32, L2