A study published in Contemporary Economic Policy investigated the extent to which a company’s political investments influence their success in the competition for federal contracts.
The study, which analyzed information on S&P 1500 firms from 1999 to 2019 available from several different databases, revealed a positive relation between a firm’s political power and the number of contracts awarded, the size of the contracts, and the favorableness of the contract terms.
Interestingly, engagement with local politicians, who have incentives to support employers in their districts, was more useful to firms than engagement with national politicians when seeking to secure federal contracts.
The research also showed that companies strategically shift political donations toward more electable politicians when their influence declines.
“At a time of growing public concern about money in politics, these insights offer a timely, evidence-based look at how political relationships shape federal contracting and corporate behavior,” said corresponding author Stephen P. Ferris, Ph.D., of the University of North Texas.
Publication details
All Politics is Local: Corporate Political Power and the Award of Federal Contracts, Contemporary Economic Policy (2026). DOI: 10.1111/coep.70032
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