Bringing home the bacon: do politicians on boards increase firms’ government contracts?
ISSN: 1746-5680
Article publication date: 27 September 2023
Issue publication date: 12 April 2024
Abstract
Purpose
The US Federal Government awards contracts worth hundreds of billions of dollars each year. Many firms that rely on these contracts have appointed former government officials to their corporate boards in the hopes of securing government contracts. The purpose of this paper is to examine the relationship between these government experienced directors (GEDs) on boards and firms being awarded government contracts.
Design/methodology/approach
The paper compiles a panel data set from 2017 to 2020 for S&P 500 firms. This includes hand-collected data for government-experienced directors on boards. This is tested using both regression and analysis of variance methodologies.
Findings
Results find that former government officials on corporate boards increase the amount of government contracts secured by the firm, both in absolute terms and as a percentage of firms’ revenue. There are significant industry level effects for the health care and financials sectors. Government-experienced directors on boards are also positively related to firms receiving COVID contracts. Lobbying was not found to be related to the securing of regular government contracts but was positively related to firms obtaining COVID contracts.
Originality/value
This paper contributes to the literature by using panel data, an expanded definition of GEDs and data on COVID contracts. The “revolving door” between government and firms is paying off for companies.
Keywords
Acknowledgements
The authors would like to thank Dr. Martin Conyon of Bentley University and Dr. Simon Peck of Case Western Reserve University for their many comments which improved the quality of this paper.
Citation
Wasson, T. and Quinn, M. (2024), "Bringing home the bacon: do politicians on boards increase firms’ government contracts?", Society and Business Review, Vol. 19 No. 2, pp. 336-350. https://doi.org/10.1108/SBR-04-2023-0102
Publisher
:Emerald Publishing Limited
Copyright © 2023, Emerald Publishing Limited