Association for Public Policy Analysis & Management

A growing body of empirical finance literature suggests that lobbying is a value-adding activity for publicly traded companies and their shareholders. One plausible way in which lobbying can provide value is by reducing the cost of doing business, particularly for firms in heavily regulated industries. This brings up an important question: can lobbying activities lead to detrimental outcomes in industries where maintaining safety and health of employees comprises a non-trivial cost of operations? In this paper I investigate whether lobbying influences the outcomes of safety and health inspections of U.S. mining companies. To carry out my analysis, I combine detailed lobbying disclosure information from the Senate Office of Public Records with safety and health inspection data from the U.S. Mine Safety and Health Administration. Because lobbying is likely to be endogenous to a company's regulatory context and history, I instrument for mine owners' probability of lobbying with a variable that captures their ties to Congressional representatives, specifically those associated with House and Senate committees that deal with labor issues. I find no statistically significant difference in financial penalties for safety and health regulation violations for mine owners who lobbied for labor issues and those who did not. These results suggests that lobbying may not be effective in the specific context of mine safety and health. In other words, lobbying dollars appear not to corrupt U.S. mine regulators.