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Abstract

Do firms intensify their lobbying efforts during challenging times to minimize losses, or do they tend to lobby more when additional resources are available? This dissertation examines how companies utilize lobbying to respond to negative shocks, specifically focusing on the impacts of Hurricane Katrina in 2005 and Hurricane Harvey in 2017. I leverage the Lobbying Disclosure Act of 1995, which requires reporting federal lobbying activities. I construct a unique dataset by matching federal lobbying records with firm-level and business establishment location data. Employing the synthetic control methodology, I estimate the causal effects of these disasters on corporate lobbying behavior, comparing firms directly affected by the hurricanes to those that were not before and after the disasters. I find that, following both Hurricane Katrina and Hurricane Harvey, affected firms increased their lobbying expenditures, with the most pronounced increases occurring during the year of the disaster. These results support the hypothesis that firms strategically use lobbying to mitigate potential losses. Specifically, I observe a 190\% increase in lobbying expenditures after Hurricane Katrina and a 48\% rise following Hurricane Harvey. However, the responses to both hurricanes are smaller than previous estimates in the literature obtained in the context of the 2008 financial crisis. I identify differences in relative damages, industry composition variations, and political connections as potential mechanisms behind these disparities.

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