Link between corporate profits, political gifts?

It's difficult to say whether political involvement makes a company perform any better, but a University of South Florida business professor sees a solid line connecting the dots.

Sean Lux, a graduate-level instructor at USF's Center for Entrepreneurship, has completed a study titled “Mixing Business with Politics” that reveals a 20% boost in the profits of businesses that engage in lobbying and campaign contributions. The study was performed with Russell Crook and David Woehr at the University of Tennessee.

The trio's analysis of more than 7,000 businesses found that larger companies are more likely to be politically active, with incumbents and high-powered candidates being more likely to get corporate attention. They also point to a U.S. Supreme Court decision earlier this year that removed company spending limits on political campaigns, noting the higher amount of contributions to politicians in a non-presidential election year.

“I can't begin to speculate as to why corporate political activity bolsters businesses' bottom lines,” Lux tells Coffee Talk. However, he is concerned that corporate political activity restricts the natural flow of business, even if it isn't illegal anymore.