6. Discussion
6.1. Implications for theory and literature This paper has implications for both current theory and topical literature. First, the paper contributes to theories of rent-seeking through political activities, which has had ever-increasing popularity in recent years (Lux et al., 2011). The results herein point to the ability of firms to garner rents through their actions in the nonmarket, and specifically in the public policy arena. While there has been previous evidence pointing to this relationship (Hillman, 2005; Richter et al., 2009; Bonardi et al., 2006), there are competing views of CPA and subsequent performance. Most notable of these is that CPA is an “arms race” amongst firms and incremental spending on political activity does not lead to marginal rents, but instead leads to a zero sum game (Ansolabehere et al., 2003). This view, which addresses the Tullock Paradox (Tullock, 1972), while interesting has had little to no support in the empirical CPA literature. While the findings in the current work do not constitute proof to dispute Ansolabehere et al. (2003)’s contentions, it does constitute additional evidence to the contrary.
