This paper analyzes data from Clinard's publication Illegal Corporate Behavior. The paper transforms the data from the study into usable form and then conducts secondary analyses testing how well such data serve various kinds of inquiries. Using datasets 1 and/or 2, the paper calculates the same values that Boise calculated
Illegal Corporate Activities
Clinard's publication concerns corporate violations of stipulated laws by 582 public corporations in the United States of America. In addition, the extent and nature as well as the economic settings the violations occurred are also looked at. The study used data from the firms' sales to calculate their levels of diversification and levels of concentration among other variables. In this paper, the publication in scrutiny used sources of data though they never gave in-depth information on all violations; this makes this analysis lean on one side and may not give the actual results.
Descriptive Statistics
Descriptive statistics is used here to summarize the study sample as well as the observations that have been made. The main summary used is quantitative form of the data. From the data outlined in the first codebook, the five-year mean for corporate sales is 99. This is the logged value for the five years mean of corporate sales (Clinard & Yeager, 1987). The actual number is coded. The mean for R&D expenses/Sales is given as 9.999999 with the mean deviation standing at 9,999,999. The mean for labor expenses/sales is also given as 9.
In addition, the mean income per total assets is calculated to be 9,999,999 with the actual number likely to rate higher; the actual number is not given in this article. The mean for net income per average common equity is formulated as 999.9999. This is calculated as Ace = Equity (Time T) + Equity (T-1)/2 resulting in the deck identification of '02'. The mean for debts vs. assets is 9,000,000; Total Debt = long-term debt + liabilities.
Moreover, the mean for sales per total assets is given as 99.99999. Retained earnings against total assets are given as 9.999999 while the mean for current assets minus liabilities is also the same. Furthermore, the mean for assets per employees for the five years is given as 99.0000 having a deck identification number of '03'.
For the analysis of trends in growth, the trends are computed as the slopes of the regression lines generated by regressing, and unstandardized B's used to indicate trends. Besides, the degree of firm diversification is 1 calculated as 1- (sum I p-squared i), where p is the ratio of the firm's sales and I is the firm's total non-foreign sales. The industries are indicated at the two-digit level of the Sic codes. In line with this, the firms' 3rd diversification is also calculated using the above formula. However, this is based on the firm's manufacturing industry lines of operations; Sic type 20 to 39 and sales. The industries are indicated at two-digit level of the codes. The fourth degree of diversification is the same but industries are indicated at the four-digit level of Sic codes.
The average concentration ratio in all the manufacturing industries (sic types 20-39) in which the firm operated, is weighted by the relative importance of each industry to the firm based on its sales in each four-digit sic category.
Money, Business, and the State
Boies ascertains in his article that there are several variables that influence large firms' political behaviors. These variables include resource availability including firm size; material interests such as government interests; political behavior including campaign contributions among others. Outlined below are some data sources for the variables used by the writer.
Variables
Units and Coding
Data Sources
Dependent variables
1978 PAC receipts
Dollars
US FEC 1982
1980 PAC receipts
Dollars
Resource availability
Annual sales in 1979
1,000s of dollars
Colvin and Knight 1980
Number of employees in 1979
Persons
Return to investors in 1979
10,000s of dollars
Earnings per share in 1979
Dollars
Growth rate for 1969-1979
Percent
Clinard and Yeager 1981
R&D to sales ratio
Ratio
Labor/sales ratio
Ratio
Free riders
Average concentration ratio
Ratio
Clinard and Yeager 1981
Relative firm dominance
Percent
Material interests
Unique legal actions
Legal action
Clinard and Yeager 1981
Defense contracts in 1979
1,000s of dollars
US Sec of Defense 1979
Total mergers and acquisitions 1960-1979
1,000,000s of dollars
Bureau of Economics 1981
Previous political action
Business council membership
1=yes 0=none
Shoup 1980
Campaign donations of top managers in 1972
Dollars
Paul 1975
Industry effects
Lumber and paper firms
1=member of industry 0=other industry
From Fortune Industry Codes, See Colvin and Knight 1980
Chemical firms
Oil producing firms
Automotive firms
Aerospace firms
Pharmaceutical firms
In this study, firm size is formulated as the total annual sales in thousands of dollars and the number of people employed by each corporation in 1979. Other measures of resources used in this analysis include the five-year mean for the ration of each firm's research and development expenditures to sales; R. And D. As well as the labor costs to sales ratio (Boies, 1989). These measures are reflective of necessary daily business activities. In addition, since economic health of business also influence resources available for politics, return to investors for 1979, earnings per share as well as growth rate for 1969 till 1979 they are included as variables in the analysis.
In analyzing these variables, Boies concludes that the value of mergers summed over the 20-year period of the series. The larger the value of the merger of a firm, the likelihood of losing antitrust lawsuits is higher. Thus, increased mergers and acquisitions are likely to bring about political activity to counter government actions.
Variable name
Mean
Standard deviation
Minimum
Maximum
N
Dependent Variables
1976 PACs ($)
6,816.3
20,080.2
0.0
183,573
1980 PACs ($)
29,889.8
56,296.6
0.0
445,776
Resource Availability
Annual Sales (1000s $)
2,890,237
6,323,718.97
409,662
79,106,471
Employees
32,366.72
58,327.972
853,000
Return to Investors in 1979 (10,000s $)
3,872.73
4,744.05
12
59,230
Earnings/Share in 1979 ($)
8.75
19.34
0.04
26.22
Growth rate 1969-1979 (%)
22.51
28.43
0.0
54.77
R&D/sales ratio
0.022
0.022
0.0
0.130
Labor/sales ratio
0.281
0.097
0.060
0.460
Free Riders
Concentration ratio
0.405
0.133
0.140
0.890
Relative firm dominance
0.147
0.109
0.010
0.670
Material Interests
Unique legal actions
1.289
2.015
0.0
14.00
Defense contracts (1000s $)
68,344.404
310,220.61
0.0
3,492,140.0
Mergers and acquisitions (1,000,000s $)
0.0
4,468.0
Previous Political action
Business council membership
0.152
0.359
0.0
1.0
Campaign donations of top managers in 1972 ($)
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