The stakes of global venue shopping: examining bank lobbying in the Basel Committee and the European Union

Abstract

The galloping pace of globalisation has not only led to the expansion of firms across national borders and an exponential increase in the interdependency of international markets, but it has also triggered the development of the regulatory environment into a multilevel arena consisting of numerous and often overlapping and competing global institutions and regulatory jurisdictions. Our paper examines venue shopping at this global level. We argue that existing theories of multilevel venue shopping are not well suited to explaining global venue shopping. Advancing a novel theoretical framework, we argue that the decision to lobby multiple global venues is a function of the extent of firms’ international business activities and investments. We test this theory in the case of post-crisis banking regulation in the European Union and the Basel Committee on Banking Supervision. Assessing banks’ international activities in terms of the number, international scope, and geographical diversity of their subsidiaries, we find evidence supporting our argument. The new post-crisis banking rules posed a serious threat to banks’ international financial activities and banks facing the greatest costs of these new rules were also most likely to engage in global venue shopping.