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UC San Diego UC San Diego Electronic Theses and Dissertations UC San Diego UC San Diego Electronic Theses and Dissertations Title A political theory of the firm : why ownership matters Permalink https://escholarship.org/uc/item/9n89r27t Author Clark Muntean, Susan Publication Date 2009 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California UNIVERSITY OF CALIFORNIA, SAN DIEGO A Political Theory of the Firm: Why Ownership Matters A dissertation submitted in partial satisfaction of the requirements for the degree Doctor of Philosophy in Political Science by Susan Clark Muntean Committee in charge: Gary Jacobson, Chair John Cioffi Peter Gourevitch Stephan Haggard Mathew McCubbins Samuel Popkin 2009 Copyright Susan Clark Muntean, 2009 All rights reserved. SIGNATURE PAGE The dissertation of Susan Clark Muntean is approved, and it is acceptable in quality and form for publication on microfilm and electronically: Chair University of California, San Diego 2009 iii DEDICATION In memory of Donald V. Clark (1929-2008) iv EPIGRAPH “To compare the study of business administration with that of political obligation may appear ridiculous at first glance, but a moment’s reflection will reveal that methodologically the two are precisely analogous in their relation to economics on the one hand and to politics on the other.” James M. Buchanan “Marginal Notes on Reading Political Philosophy,” The Calculus of Consent . v TABLE OF CONTENTS SIGNATURE PAGE ....................................................................................................... iii DEDICATION ................................................................................................................ iv EPIGRAPH ....................................................................................................................... v TABLE OF CONTENTS ................................................................................................ vi LIST OF FIGURES ......................................................................................................... ix LIST OF TABLES ........................................................................................................... x ACKNOWLEDGEMENTS ........................................................................................... xii VITA ............................................................................................................................... xv ABSTRACT OF THE DISSERTATION ..................................................................... xvii CHAPTER 1. INTRODUCTION .................................................................................... 1 1.1. Theoretical and Empirical Puzzles ............................................................................ 1 1.2. Improving Theory and Measurement ........................................................................ 3 1.3. Ownership as Explanatory Variable .......................................................................... 6 1.4. Partisan Choice in Corporate Contributions .............................................................. 7 1.5. Firm Response to Campaign Finance Legislation ..................................................... 9 1.6. Methodology ............................................................................................................ 10 1.7. Conclusion ............................................................................................................... 12 CHAPTER 2. POLITICAL MODELS OF FIRMS ..................................................... 14 2.1. Rational Choice School ........................................................................................... 14 2.2. Formal and Informational Models ........................................................................... 15 2.3. Corporate Political Action (“CPA”) ........................................................................ 17 2.4. Business is Unified .................................................................................................. 23 2.5. Business is Divided ................................................................................................. 25 2.6. Corporate Money in Politics .................................................................................... 30 CHAPTER 3. A POLITICAL THEORY OF THE FIRM .......................................... 33 3.1. Why We Need a New Theory ................................................................................. 33 3.2. Why Firms Give ...................................................................................................... 37 3.3. The Ownership Model ............................................................................................. 39 3.4. Arguments ............................................................................................................... 40 3.5. Assumptions ............................................................................................................ 41 3.6. Corporate Political Actors ....................................................................................... 43 3.7. Individuals or Families as Principal Owners ........................................................... 45 3.8. Questions the Theory Raises ................................................................................... 48 CHAPTER 4. CORPORATIONS IN AMERICAN POLITICS: A CAUSAL RELATIONSHIP BETWEEN OWNERSHIP AND BEHAVIOR ............................ 52 4.1. Introduction ............................................................................................................. 52 4.2. Data Description ...................................................................................................... 52 4.3. Research Design ...................................................................................................... 53 4.4. Preliminary Findings ............................................................................................... 54 vi 4.5. Causality Model Based upon Ownership ................................................................ 58 4.6. Methodology ............................................................................................................ 61 4.7. Genetic Matching Results ........................................................................................ 63 4.8. Description of Data and Groups after Matching ..................................................... 64 4.9. OLS and Tobit ......................................................................................................... 65 4.10. Heckman Method (Heckit) .................................................................................... 67 4.11. Findings from the Heckman Model ....................................................................... 68 4.12. Interpretation ......................................................................................................... 73 4.13. Limitations ............................................................................................................. 74 4.14. Conclusion ............................................................................................................. 75 4.15. Addendum 1: Coding ............................................................................................ 76 CHAPTER 5. OWNERSHIP STRUCTURE OF THE FIRM AS A PREDICTOR OF INTRA-INDUSTRY VARIATION IN PARTISAN PREFERENCES ...................... 77 5.1. Introduction ............................................................................................................. 77 5.2. The Problem with Industry Level Data ................................................................... 77 5.3. Existing Hypotheses and Predicted Behaviors ........................................................ 79 5.4. Alternative Hypothesis ............................................................................................ 80 5.5. Methodology ............................................................................................................ 81 5.6. Findings: Intra-Industry Variation ........................................................................... 82 5.7. Conclusion ............................................................................................................... 89 5.8. Addendum 1: Multiple Regression Estimates Using OLS ...................................... 92 5.9. Addendum 2: Fourteen Industries Codified and Analyzed ..................................... 93 CHAPTER 6. CORPORATE CONTRIBUTIONS POST-BCRA: A REASSESSMENT........................................................................................................... 94 6.1. Introduction ............................................................................................................. 94 6.2. Existing Claims and Explanations ........................................................................... 95 6.3. An Alternative Account ........................................................................................... 96 6.4. A Tale of Two Firm-Types ...................................................................................... 97 6.5. Interpretation ......................................................................................................... 101 6.6. Who Are These 527 Megadonors? ........................................................................ 103 6.7. Formal Analysis ..................................................................................................... 103 6.8. Firm-Level Variables
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