Document Type
Article
Abstract
We study the emergence of a new channel for firms’ political activity using dark money through undisclosed and unlimited contributions. After the U.S. federal court decisions in 2010, S&P 500 firms substantially increased their use of dark money. We find that dark money contributions complement political engagement through campaign contributions and lobbying. Firms disclose dark money contributions when they face heightened nondisclosure costs. Firms contributing to dark money groups benefit by receiving more procurement contracts and increased government subsidies. Our findings highlight that political connections by firms are evolving and expanding through new and largely unexplored channels. (JEL D72, D73, G38, H57)
Digital Object Identifier (DOI)
Publication Info
Published in The Review of Corporate Finance Studies, Volume 14, Issue 4, 2025, pages 989-1023.
APA Citation
Denes, M., & Scanlon, M. M. (2025). Shining a Light on Firms’ Political Connections: The Role of Dark Money. The Review of Corporate Finance Studies, 14(4).https://doi.org/10.1093/rcfs/cfaf016
Rights
© The Author(s) 2025. Published by Oxford University Press on behalf of The Society for Financial Studies. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs licence (https://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact reprints@oup.com for reprints and translation rights for reprints. All other permissions can be obtained through our RightsLink service via the Permissions link on the article page on our site—for further information please contact journals.permissions@oup.com.