Corporate lobbying and firm performance: The non-interchangeability of firm size proxies (with Girard, A. and Gnabo, J-Y.,)
The evidence on the influence of lobbying on firm performance is surprisingly mixed. This paper documents that the sensitivity of these empirical results stems from the use of different measures of firm size. We assess how the results change across alternative firm size proxies while replicating models from the corporate finance literature. The estimates show that the discrepancy is mainly driven by an omitted-variable bias arising from the non-interchangeability of firm size proxies. Once we address this omitted variable bias and self-selection concerns, we find a positive association between lobbying expenditures and firm performance.
Presented @ Universidad de los Andes (Bogota) - Management School internal seminar (2023), Belgian Financial Research Forum (2023), UCLouvain Saint-Louis Brussels (2022) and the UCLouvain doctoral workshops (2022). (Working paper available upon request)
Managerial risk-taking incentives and political connections: Evidence from FAS123R (with Girard, A., Gnabo, J-Y., and Mantilla, D.)
We study whether shareholders use option-based executive compensation and corporate lobbying as complementary instruments for managing firm risk. Option compensation rewards a risk-averse manager for accepting volatile investments, and lobbying compresses the regulatory tail risk that would otherwise prevent the manager from accepting them, so the two are strategic complements. Using the 2005 implementation of FAS 123R, which lowered the use of option compensation most at firms with the largest pre-reform implied option expense, we estimate that the decline in option compensation reduces lobbying by 0.65 log points. The reform does not move the firm’s other forms of political activity, consistent with the shock acting on lobbying, the flexible instrument that insures the firm against political risk, rather than on corporate political activity in general. Suggestive evidence indicates that the lobbying response moves with exposure to political risk and not with exposure to non-political risk, consistent with a mechanism of political-risk insurance rather than of general business uncertainty.
Presented @ LAGV AMSE (Marseille, 2025), Research Seminar in Finance (Tecnologico de Monterrey, 2025, Mexico), The 12th Christmas Meeting of Belgian Economists (University of Antwerp, 2024, Belgium), CeReFiM seminar (Université de Namur, 2024, Belgium), Universidad de Los Andes School of Management 2024 Research Symposium (Bogota, 2024, Colombia), Universidad de Los Andes School of Management AGORA Seminar (Bogota, 2023, Colombia). (Early working paper version upon request)
Interlocking directorates and risk-taking incentives (with Mantilla, D. and Schorch, S.)
This paper studies how directorate interlocks impact risk-taking incentives. Using option-based compensation to measure risk-taking incentives, we demonstrate that directors with a larger network are less sensitive to risk. To support the causal hypothesis, we leverage executives exit of a firm as a quasi-natural experiment to explore the network-risk relationship. The exit of an executive decreases the centrality of the executives from the firm and the executives indirectly linked to the same firm, resulting in a plausibly exogenous decrease of their network. Our results are in line with the resource dependency theory suggesting that networks reduce uncertainty.
Presented @ Universidad de Los Andes School of Management (Bogota, internal seminar, forthcoming). (Early working paper version upon request)
2025 - Corporate lobbying and US federal grants: Information in exchange for compensation (single-authored paper) Journal of Financial Stability, 83, 101473 (doi: https://doi.org/10.1016/j.jfs.2025.101473).
2025 - Lobbying and cartel enforcement (with Girard, A. and Gnabo, J-Y.) Applied Economics, 1–16 (doi: https://doi.org/10.1080/00036846.2025.2559202).
2024 - Leniency policy in hub and spoke cartels (with Buts, C., Jegers, M. and Vander Vennet, N.) European Competition Journal, 1–24 (doi: https://doi.org/10.1080/17441056.2024.2440227).
2023 - Corporate lobbying and firm performance variability (with Girard, A. and Gnabo, J-Y.) Finance Research Letters, 58, 104524 (doi: https://doi.org/10.1016/j.frl.2023.104524)
2023 - Firm performance and the crowd effect in lobbying competition (with Girard, A. and Gnabo, J-Y.) Finance Research Letters, 53, 103618 (doi: https://doi.org/10.1016/j.frl.2022.103618).
2019 - Hub and Spoke Cartels: Incentives, Mechanisms and Stability (with Buts, C.) European Competition and Regulatory Law Review (CoRe), 3(1), 4-16 (doi: https://doi.org/10.21552/core/2019/1/4).
“The effect of a decline in conflict on household investment: Evidence from Colombia” (with Carpena, F. (U Oslo) and Galle, S. (BI))
“The effect of crime concentration on deforestation: Evidence from Colombia” (with Minoru Higa, Universidad de los Andes)
“Common ownership and lobbying” (with Fiona Kasperk, Oxford University)
“Merger enforcement and licensing” (with Logan Emery, Erasmus University)
“Venture capital investments and political connections” (with Gianluca Gucciardi, Bicocca University)
“Comprendre les dynamiques économiques et de colonialité qui endiguent la décolonisation de la santé publique : construction d’un cadre conceptuel à l’aide d’une revue de la littérature” (with Yasmine El Addouli, Kit Royal Tropical Institute & Sherihane Bensemmane, Sciensano)