Abstract: This study examines the role of insider lobbying as a form of Corporate Political Activity (CPA) that can be used by firms to gain an advantage in the competition for government contracts. Drawing on a unique dataset that captures meetings between private companies and British government ministers, we find that the breadth and depth of insider lobbying by firms competing for defence contracts is positively related to the value of the contracts that they are awarded. Furthermore, utilising a 2-step procedure we find evidence that this relationship is robust to potential selection effects relating to the propensity of firms with proximity to government to lobby politicians. These findings suggest that gaining direct access to politicians may be a particularly successful strategy for improving firm outcomes, and that the gains from insider lobbying are linear in direction. We discuss the implications of our study for firms competing for government contracts, and for policy-makers concerned about the transparency and efficiency of the contracting process.
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