Who pays a visit to Brussels? Cross-border firm value effects of meetings with European Commissioners

Authors: Kizkitza Biguri (BI Norwegian Business School),  Jörg Stahl (Católica Lisbon School of Business & Economics)

Title: Who pays a visit to Brussels? Cross-border firm value effects of meetings with European Commissioners

Abstract: Analyzing novel data on meetings of U.S. company representatives with European Commission policy-makers in Brussels from end 2014 to end 2018, we find that meetings with European Commissioners are associated with substantial positive abnormal equity returns. Compiling a data set on decisions of merger cases at the European Commission, we show that U.S. firms with meetings at the EU Commission are substantially more likely to receive a favorable decision than their peers without access. In addition, we find that U.S. firms with political access have a higher propensity to locate their European subsidiaries in EU tax havens. Both findings suggest that influencing EU Commissioners as the EU's executive authority with legislative initiative can be valuable for firms. Our study contributes to the scant literature on political access to the executive branch, and it presents novel evidence on the value of political access in a cross-border setting.