This paper finds that stricter laws regulating third-party debt collection reduce the number of third-party debt collectors, lower the recovery rates on delinquent credit card loans, and lead to a modest decrease in the openings of new revolving lines of credit. Further, stricter third-party debt collection laws are associated with fewer consumer lawsuits against third-party debt collectors but not with a reduction in the overall number of consumer complaints. Overall, stricter third-party debt collection laws appear to restrict access to new revolving credit but have an ambiguous effect on the nonpecuniary costs that the debt collection process imposes on borrowers.

We find that corporate governance and executives’ personal financial incentives are important determinants of firms’ ability to extract benefits from political participation . Firms with more independent boards are more likely to establish corporate political action committees (PACs), and executives in such firms exhibit a stronger sensitivity of campaign contributions to their personal equity stakes. We also show that disperse ownership limits PACs’ ability to raise funds because even large firm-level benefits from political participation may become insignificant for individuals with small equity stakes. This may help explain why aggregate PAC contributions remain relatively small compared to the large firm-value benefits such contributions can provide. However, the negative effect of disperse ownership on political donations is mitigated by corporate governance , as well-governed firms are able to better align their managers’ incentives with the benefits from corporate political participation.

Prior research suggests that the effectiveness of corporate directors depends on their qualifications. We investigate whether directors' qualifications affect the roles they perform on the board (board functions) and their compensation. On average, directors that are more qualified handle more board functions, resulting in higher pay, but this is not true for “co-opted” directors (joined the board after the CEO). However, co-opted directors are assigned more functions and receive higher pay on boards where the CEO's influence is high. We also find that some firms award directors “discretionary compensation” (compensation that is unrelated to board functions), and that the likelihood of such compensation is correlated with CEO power. Overall, our evidence generates new insights into how director roles and financial incentives are allocated across directors, and the extent to which this allocation depends on CEO power.

We study the relation between CEO and employee campaign contributions and find that CEO-supported political candidates receive 3 times more money from employees than candidates not supported by the CEO. This relation holds around CEO departures, including plausibly exogenous departures due to retirement or death. Equity returns are significantly higher when CEO-supported candidates win elections than when employee-supported candidates win, suggesting that CEOs’ campaign contributions are more aligned with the interests of shareholders than are employee contributions. Finally, employees whose donations are misaligned with their CEOs’ political preferences are more likely to leave their employer.