Abstract
In the corporate political activity literature, abundant research has examined the lobbying activity in the United States and its relationship with firms’ financial performance. Lobbying in the US emerged at the same time as the state itself, and the democratic system of government contributed to its rapid development. However, there have been few studies of firms headquartered outside the United States and that examine how nationality affects their lobbying activity. This paper relies on institutional theory to argue that high lobbying expenditures by multinational corporations would increase its annual revenue. It also argues that this effect is moderated by the nationality of the firm and its size. The formulated hypotheses were tested using a sample of 51 pharmaceutical companies spanning the fifteen-year period 2005–2020 and representing 12 countries. As moderators, two measurements of the size of the company were used: total assets and the number of employees. The obtained findings support the hypothesis on the relationship between lobbying expenditure and annual revenue, as described above. However, the findings do not support the arguments about a moderating effect of size on this relationship. The study is limited to the one specific sector. However, due to the universality of measurement, further comparative studies between sectors in different countries are possible. The study results enhance the understanding of the factors that determine corporate political activity and provide insights for further development of the topic and the extension of knowledge. This study holds important implications for firms’ personnel policy, lobbying strategy optimisation and business location management.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: Vestnik of Saint Petersburg University. Management
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.