We find that corporate access to the executive in the United Kingdom fails to deliver financial benefits to firms. We use two measures of access for the United Kingdom’s largest 2049 firms between 2013 and 2019: (1) all meetings between corporate representatives and ministers and (2) all state non-executive directorships held by the employees of those firms. Both meetings and non-executive directors (NEDs) skew dramatically towards a group of large firms that have regular access to government, overwhelmingly the Department of Business and the Treasury. Once we correct for endogeneity, we show that various versions of the NED and meeting measures are not consistently associated with seven financial outcomes. By contrast, using a matching exercise, we observe that elite firms with giant market values and weekly interactions with the government gain relative to peers. Since so few corporate executives get regular access to government, their occasional meetings may serve to aid policymaking without distorting it or distracting noticeably from a business leader’s principal duties.
Fahey et al. (Wed,) studied this question.