Abstract
This thesis contains three essays investigating the effects of common ownership on firms’ corporate lobbying activities and environmental performances. In the first essay, we investigate the relationship between common ownership and corporate lobbying activities of US pharmaceutical firms. We find commonly held firms lobby less than non-commonly held firms. This negative effect is more pronounced for commonly held firms with trade association membership, suggesting firms coordinate lobbying efforts as a collective action under common ownership and thus reduce individual lobbying. However, commonly held firms increase lobbying when they apply for FDA’s patent approvals and face patent expirations. Overall, we uncover a new channel, ‘political lobbying’, through which common owners can influence product market outcomes of their portfolio firms.The second essay examines the relationship between common ownership and firms’ lobbying activities on climate bills. We show that commonly-held firms’ lobbying activities can make climate bills more likely to fail, suggesting their lack of collective willingness to face climate-related challenges. We find a positive relationship between common ownership and corporate lobbying activities on the climate bills that failed but no significant impact of common ownership on passed climate bills. More importantly, corporate political ideologies, i.e., the Republicans vs. the Democrats, drive how commonly held firms engage in climate lobbying activities.
In the third essay, we examine how political ideology affects the efficacy of common ownership on firms’ environmental performances. We find a negative relationship between common ownership and their portfolio firms’ environmental performances. More importantly, the negative relationship depends on the firms’ political ideology. Common ownership leads to lower environmental performance only for Republican-leaning firms. We contribute to the literature on ESG issues and the recent discussion of whether institutional investors incorporate ESG issues into their investment decisions as they claim.
| Date of Award | 20 Jun 2023 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Kirak Kim (Supervisor), Neslihan Ozkan (Supervisor) & Xinyu Cui (Supervisor) |