The partisan ties of lobbying firms

Abstract

This article examines lobbying firms as intermediaries between organized interests and legislators in the United States. It states a partisan theory of legislative subsidy in which lobbying firms are institutions with relatively stable partisan identities. Firms generate greater revenues when their clients believe that firms’ partisan ties are valued highly by members of Congress. It hypothesizes that firms that have partisan ties to the majority party receive greater revenues than do firms that do not have such ties, as well as that partisan ties with the House majority party lead to greater financial returns than do partisan ties to the Senate majority party. These hypotheses are tested using data available under the Lobbying Disclosure Act from 2008 to 2016. Panel regression analysis indicates that firms receive financial benefits when they have partisan ties with the majority party in the House but not necessarily with the Senate majority party, while controlling for firm-level covariates (number of clients, diversity, and organizational characteristics). A difference-in-differences analysis establishes that Democratically aligned lobbying firms experienced financial losses when the Republican Party reclaimed the House in 2011, but there were no significant differences between Republican and Democratic firms when the Republicans reclaimed the Senate in 2015.