Volume 10, 1999
Proceedings of the Tenth Annual Meeting
Douglas A. Schuler, Karen E. Schnietz
Hustled? U.S. Foreign Trade Missions, Corporate Political Contributions and Changes in Firm Value
The Clinton Administration's activist foreign trade mission program has received much attention. Commerce Secretary Ron Brown was applauded for helping American firms break into often difficult-to-enter emerging markets. Since the number of firms seeking to participate regularly outstrips the supply of seats on missions, firms appear to agree that they provide economic benefit. However, there have also been widespread allegations that firms are chosen for participation based on political contributions. This paper finds that, although the firms chosen to participate on trade missions made significantly larger political contributions than firms not chosen for participation, they experienced no increase in shareholder value.