Lobbying and Political Risk Disclosure: Do Socially Responsible Firms Voluntarily Disclose More?

Abstract Drawing on theories of strategic communication, legitimacy, impression management and moral capital, this study investigates whether firms use political risk disclosure to offset negative perceptions associated with corporate lobbying. Using a sample of 10,120 observations from 1362 US firms between 2002 and 2018, we find that firms with greater lobbying expenditure and frequency provide more political risk disclosure. This positive association is stronger for firms with higher corporate social responsibility (CSR) performance, suggesting that CSR‐performing firms disclose more to align their actions with stakeholder expectations. However, firms lobbying for CSR‐related issues disclose less, relying on the reputational insurance CSR provides and aiming to avoid disclosing firms’ political risk that may contain sensitive information. Our findings contribute to the voluntary disclosure and lobbying literatures and offer practical insights into how firms strategically manage stakeholder perceptions and moral capital.