Can Stakeholders Mobilize Businesses for the Protection of Democracy? Evidence from the U.S. Capitol Insurrection

Abstract

An unprecedented number of major U.S. companies announced changes to their campaign contributions following the Capitol insurrection on January 6, 2021. We analyze the role of corporate stakeholders in these announcements as well as their implications for democratic institutions and business-government relations. Mirroring polarized public reactions to the Capitol insurrection, companies with more Democratic-leaning stakeholders (e.g., employees, consumers, shareholders) were more likely to publicly refuse contributing to Republican legislators who objected to the electoral college results. Moreover, these pledges held up in available campaign finance records through the third quarter of 2021, implying significant losses in corporate political action committee contributions for said Republican legislators. Given increasing polarization and heightened expectations of the civic responsibility of businesses, the partisanship of corporate stakeholders may prove important in mobilizing businesses to protect democratic institutions. However, such stakeholder pressure may also weaken businesses' bipartisan legislative coalitions and compel corporate influence-seeking activities to go dark.