The Exposure Theory of Access: Why Some Firms Seek More Access to Incumbents Than Others

Abstract

Studies of American politics consistently find little link between campaign contributions and electoral and policy outcomes, concluding that donors gain little from donating. Despite this, the donations of access-oriented interest groups continue to generate a large part of incumbents’ financial advantage in U.S. legislative campaigns. We argue that we can learn directly about the motivations of interest groups, and indirectly about the possible value that they extract from incumbents, by examining differences in the degree to which they seek access. Specifically, we construct a measure of firm-level exposure to regulation using the text of over 170,000 SEC filings, and we use a variety of empirical techniques to estimate how firms’ sensitivity to incumbency varies with exposure. The results indicate that firms seek more access to incumbents when they are more exposed to regulation. Exposure to the effects of policy decisions therefore appears to be an important motivator of firm contribution behavior, suggesting that firms seek access in order to influence policy, and that they benefit, or at the very least believe that they benefit, from doing so.