How Contributions to the Common Good Help with Individual Goals

Abstract

Most studies have shown that firms’ collective efforts in nascent industries can help them achieve collective goals; however, few studies have explored whether firms’ commitment to collective actions will contribute to their individual goals. This paper extends collective corporate political activity literature to theorize how a firm’s commitment to collective actions fasten its process to get regulatory approvals. We argue that when a firm is more committed to collective actions, it learns more about regulators’ expectations of the nascent industry. Such information enables the firm to adjust products and services so that they will be approved by regulators faster. However, a firm at high risk of competitive information leaks is less likely to benefit from committing to collective creation because of a hesitancy to share information during such creation, thereby limiting its ability to learn effectively from regulators. By examining firms’ commitment in collectively creating regulations for the U.S. unmanned aircraft industry and their regulatory approvals from 2012 to 2020, we find general support for our theory.