Political costs and strategic corporate communication

• 成果类型: Article
• 署名作者: Cuny, Christine; Kim, Jungbae; Mehta, Mihir N.
• 署名单位: New York University; Singapore Management University; University of Chicago
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101; 1879-1980
• DOI: 10.1016/j.jacceco.2026.101860
• 发表日期: 2026-05
• 页码: 101860
• 关键词: information; Congress; Political cost hypothesis; Image building; firm

摘要

When subject to public scrutiny, do firms strategically use advertising to reduce expected political costs? Advertising can ease public concerns, thereby reducing the pressure on politicians to act harshly against scrutinized firms and their industries. We use repeated congressional testimony by industry members as a novel way to identify political scrutiny. Our central finding is that scrutinized industries increase their advertising spending 132 percent more in the electorates of politicians overseeing the hearings than in the electorates of other politicians. Further, strategic advertising is complementary to income-decreasing accounting choices and a substitute for lobbying. Overall, our study sheds light on a previously undocumented mechanism through which firms attempt to manage expected political costs.