Sociopolitical Claims and Corporate Political Activity

Firms increasingly take stances on polarizing issues but at the same time invest in political activities that may contradict their claims. In this paper, we analyze whether firms’ sociopolitical claims and political activities are aligned. We develop a dictionary of claims related to diversity and environmental protection based on searches for combinations of words in corporate communications and link firms’ political action committee (PAC) contributions to candidate ratings provided by political advocacy groups. Our results suggest that political activity increases with firms’ sociopolitical claims and that firms that make more sociopolitical claims contribute relatively more to politicians who promote diversity and environmental protection. However, we also document that most firms direct the majority of their contributions to politicians who may not share the firms’ communicated values. In addition, we find that economic motives reduce political alignment and that firms that make more environmental claims spend larger amounts on environmental lobbying