Corporate Political Activity Research Articles

Barriers and Facilitators Related to the Adoption of Policies to Reduce Ultra-Processed Foods Consumption: A Scoping Review

to conduct a scoping review to answer the question "What factors have influenced the adoption of food taxes, front-of-pack labeling and restrictions on marketing to children?". A scoping review was developed from four databases. Studies that described and analyzed policy processes were included. Analysis was performed to identify the barriers and enablers mentioned under the guidance of Swinburn et al., Huang et al., Mialon et al., and Kingdon. 168 documents were identified, describing experiences from five regions or groups and 23 countries, which have generated 1584 examples of 52 enablers (689 examples; 43.5%) and 55 barriers (895 examples; 56.5%) that may have influenced policies. The main enablers were related to the government environment and governance and to civil society strategies. Corporate political activity strategies were the main examples of barriers. This scoping review consolidated barriers and facilitators related to policies aimed at reducing ultra-processed foods consumption, demonstrating that factors related to the actions of governments and civil society are the main facilitators. On the other hand, as the most interested actor in promoting the consumption of these products, the strategies adopted by the companies that produce these products constitute the main barrier to these policies in all the studied countries and should be overcome.

Rethinking Democratic Legitimacy: The Role of Metagovernance in Non-Market Approaches

Purpose of the study: The aim of this study is to demonstrate why metagovernance is not effective in increasing the democratic legitimacy of networks; to this end, an articulated map will be presented to describe how interactions occur within metagoverned environments.
 Methodology/approach: To construct the macro-model of analysis, the methodology of Quivy and Campenhoudt (2005) was used. To consolidate the knowledge involved in the theoretical approach, the Knowledge Development Process-Constructivist (Proknow-C) method by Ensslin, Dutra and Ensslin (2000)was used. Such a proposal allowed a multidisciplinary perspective, capturing important concepts from economics and organizational theory to apply them to the meta-governed environment.
 Originality/Relevance: Metagovernance systems suggest some ability to provide democratic plurality to a social environment, in that we need to understand "if" and "how" this applies; metagovernance is recent in academia and is under discussion; we need to understand its impact in countries with developing institutional environments.
 Key findings: Metagoverned systems involve multiple players; difficulty of reconciliation raises transaction costs, both ex-ante - to achieve consensus in the network - and ex-post - when creating mechanisms to deal with disgruntled actors. Such a scenario leads key players to effect coalitions to 'narrow the road' to their own interests, and practice corporate political activity seeking to influence decision making. Actions will focus on impacting the public agent designated as metagovernor, in order to influence possible changes in the environment (regulation).
 Theoretical/methodological contributions: An articulated map has been proposed, presenting the cycle of interactions within a metagoverned environment. It shows that sometimes the decisions taken are not the most democratic ones, but those of interest to coalitions.
 Social contributions / to management: From a legitimacy perspective, it is necessary to understand how the outcome of networked decision-making can become more democratic, and how metagoverned environments can become less susceptible to harmful corporate political activity, especially in developing democracies.

Understanding the corporate political activity of the ultra - processed food industry in East Asia: a Philippines case study

BackgroundEvidence is mounting that the ultra - processed food industry seeks to influence food and nutrition policies in ways that support market growth and protect against regulatory threats, often at the expense of public health. However, few studies have explored how this occurs in lower - middle income countries. We aimed to explore if and how the ultra - processed food industry seeks to influence food- and nutrition - related policy processes in the Philippines, a lower - middle income country in East Asia.MethodsSemi - structured key informant interviews were conducted with ten representatives from the Philippines government and non - government organisations closely involved with nutrition policy making in the Philippines. Interview schedules and data analysis were guided by the policy dystopia model, which we used to identify the instrumental and discursive strategies used by corporate actors to influence policy outcomes.ResultsInformants were of the view that ultra - processed food companies in the Philippines sought to delay, prevent, water - down and circumvent implementation of globally recommended food and nutrition policies by engaging in a range of strategies. Discursive strategies included various tactics in which globally recommended policies were framed as being ineffective or highlighting potential unintended negative impacts. Instrumental strategies included: directly engaging with policymakers; promoting policies, such as industry - led codes and practices, as substitutes for mandatory regulations; presenting evidence and data that industry has generated themselves; and offering gifts and financial incentives to government individuals and agencies.ConclusionsIn the Philippines, the ultra - processed food industry engaged in overt activities designed to influence food and nutrition policy processes in their favour. A range of measures to minimise industry influence on policy processes should be introduced, to ensure that implemented food and nutrition policies align with best practice recommendations.

CEO values as antecedents to corporate political activity: An empirical exploration

In this article, we seek to contribute to the literature on corporate political activity (CPA) by exploring the impact of CEO values on this nonmarket activity. Building a database of CEO values by analyzing the text of quarterly earnings conference call transcripts, we test whether firms with CEOs who value achievement, universalism, or stimulation tend to invest in CPA. We argue that these three values indicate whether a CEO values advancing the interests of the firm (achievement), playing a responsible role in society (universalism), or personal satisfaction (stimulation). We find that of the three, only stimulation is positively associated with CPA, suggesting that CEOs are using CPA to satisfy themselves personally rather than achieving higher firm performance or advancing society’s interests, supporting the arguments of those who raise concerns over firm expenditures on CPA.

Australia's political engagement on health and climate change: the MJA-Lancet Countdown indicator and implications for the future.

Australia's political engagement on health and climate change: the MJA-Lancet Countdown indicator and implications for the future.

A comparative study of industry responses to government consultations about alcohol and gambling in the UK.

There is growing evidence that common strategies are used across unhealthy commodity industries (UCIs) to influence policy decisions in line with their commercial interests. To date, there have been relatively few studies comparing corporate political activity (CPA) across UCIs, especially comparing the alcohol and gambling industries. A comparative and inductive thematic analysis of alcohol and gambling industry submissions to two House of Lords (HoL) inquiries in the UK was conducted. Themes in the framing, arguments and strategies used by the alcohol and gambling industries in CPA were compared. Alcohol and gambling industry responses largely used the same framings, both in terms of the problems and solutions. This included arguing that harms are only experienced by a 'minority' of people, emphasising individual responsibility and shifting blame for harms to other industry actors. They promoted targeted or localised solutions to these harms, in place of more effective population level solutions, and emphasised the perceived harms of introducing regulation not in the industries' interests. These findings are consistent with previous literature suggesting that UCIs use the same framing and arguments to shape the narrative around their harms and solutions to those harms. This study also identified novel strategies such as shifting blame of harms to other industry actors. Policy makers should be aware of these strategies to avoid undue industry influence on policy decisions and understanding commonalities in strategies may help to inform more effective public health responses across all UCIs.

Extending the market theory of corporate political activity

Scholars studying corporate political activity (CPA) have developed a market theory that has been widely accepted. This theory's ability to predict performance, however, has been equivocal. We argue that the predictability of the market theory for CPA could improve by accounting for three kinds of constraints that limit the possible actions of the politicians, the businesses, and other interested parties as they engage in CPA. These three constraints are the politician's ideology, the nature of his or her financial contributions, and the political trends among his or her constituents. All actors are limited by these constraints, but they also could impact them. We test our hypotheses upon a unique dataset and find support for our hypotheses. We argue that using this approach to understand the pressures facing the actors involved in CPA could help scholars find a more predictable link between CPA and firm performance.

Corporate political activism, information transparency and IPO compliance costs

AbstractDue to their covert and often dubious nature, corporate political activities may encourage or facilitate opportunistic behaviors. Yet, they also subject firms to heightened visibility, which brings greater public and regulatory scrutiny. Using a hand‐collected data set of politically connected US initial public offerings (IPOs), we investigate how this tension shapes the financial reporting incentives of firms going public and the accompanying direct compliance costs. Consistent with the agency view of corporate political activism (CPA), politically active IPO issuers have worse financial reporting quality, more litigation risk and eventually pay 28% more accounting fees than their peers. Additional analysis exploiting the US Supreme Court's landmark ruling on Citizens United versus Federal Election Commission suggests that the link between CPA and IPO accounting fees is likely to be causal. Finally, our evidence indicates that the involvement of specialized financial intermediaries in the political process has implications for the IPO financial reporting quality.

Money pills: corporate political activity effect on mergers and acquisitions

PurposeThis study aims to contribute to the corporate political activities (CPAs) field by suggesting the effect of campaign contributions on the time that firms wait for regulators’ decisions.Design/methodology/approachThis paper analyzes 358 mergers and acquisitions (M&A) from 2008 to 2017 in Brazil through ordinary least squares regression with robustness control and causal operationalization in a small vote margins treatment.FindingsCampaign contributions speed up the M&A regulator’s decisions. Campaign contributions amounts proved to be effective in decreasing the waiting time for judgments of M&A deals. Besides, National Development Bank disbursements to companies in M&A deals, served as a moderator to help reduce the waiting time.Research limitations/implicationsThe main implication of this paper to the antecedents of CPA research is the estimation of time as an output of the political efforts of firms. Previous research focuses on what firms could get. Here, the authors focus on when. As a limitation, this study analyzes CPA through campaign contributions, as the only reliable source of CPA publicly available. Firms use multiple mechanisms of CPA. It would be expected for new papers to test different CPA mechanisms, such as political connections and lobbying.Practical implicationsThis study provides evidence of the use of CPA as a relevant mechanism for firms to avoid institutional risks by getting regulators’ decisions faster. This evidence is useful for firms to grant their competitive advantage in a highly volatile environment, such as an emerging market.Social implicationsWhat happens in the nonmarket environment interferes within markets. Businesses seek to finance political projects with which they are more aligned, and governments provide capital to businesses in exchange for political support. Whether to expand successfully may also depend on early entrants, who will have acquired enough leadership to dominate the market.Originality/valueWhile most of the research on nonmarket strategy focuses on what firms can get as an output for CPA efforts, this study provides here evidence on when firms can get it. As one can cite, in business, time is money.

Do they really support "your freedom of choice"? FoPNL and the food industry in Brazil.

In 2020, Brazil approved the introduction of a new front-of-package nutrition labeling (FoPNL) in the format of a magnifying glass (MG) after years of discussion. There is currently a lack of understanding of the role of the food industry in that process. This study aimed to describe the corporate political activity (CPA) of the food industry and conflicts of interest situations, as they happened during the development and approval of a new FoPNL system in Brazil. We undertook bibliographical and documentary searches using material from food companies, trade associations and front groups involved in the regulatory process. We (1) collected information about the case study context, (2) collected data from documentary sources, and (3) prepared a synthesis of the results and a timeline of key events. During the FoPNL regulatory process in Brazil, the food industry opposed the introduction of warning labels, a model supported by health authorities and implemented with success in other countries in Latin America. The food industry rather promoted a traffic-light labeling system, known to be less effective at guiding individuals to make healthier food choices. Later in the process, when it was evident that its preferred model would not be used, and a MG would rather be introduced, the food industry argued for the use of a different version of this FoPNL model. We found that the food industry, all along the process, was directly involved in and influenced the development of the FoPNL, by providing technical support, advising and lobbying policymakers. The food industry also established relationships with a consumer non-governmental organization and nutrition professional societies. The food industry also produced and disseminated information supporting its position in order to influence public opinion and high-level decision makers, and used the legal system to delay the process. The FoPNL in Brazil is neither aligned with the recommendations of international health organizations nor with existing independent scientific evidence. The new FoPNL, as adopted in Brazil, reflects some of the preferences of the industry; it is likely that the influence of that sector during the legislative process was pivotal, even if its initial proposal was not adopted.

Bimodal lobbying and trade policy outcomes: Evidence from corporate political activity under uncertainty in India

We lack insight into how firms reduce uncertainty by engaging with trade policy through corporate political activity (CPA), particularly in emerging economies. In this paper, we argue that CPA, as an instrument of nonmarket strategy, is more effective in achieving trade policy outcomes that reduce corporate uncertainty when firms pursue a bimodal approach, lobbying both collectively and individually. Collective actors such as trade associations gain influence through industry legitimacy and expertise, and can enable individual corporate lobbying to benefit from enhanced political capabilities in terms of information gathering, developing legitimacy, and aligning divergent interests. We also find that the bimodal approach is more effective for exporting firms, and when there is government support for an industry. Our empirical analysis is based on survey data of 146 Indian firms, in the context of a changing socio-political era. We contribute to the literature by highlighting the complementarity between collective and private political lobbying in reducing trade policy uncertainty. Overall, we contribute to research on CPA and nonmarket strategy, particularly in the context of emerging economy trade policy.

Lobbying expenditures as an indicator of the performance of companies in the US pharmaceutical market

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.

Corporate Political Activism and Information Transfers

Corporate Political Activism and Information Transfers

Do Firms Put Their Money Where Their Mouth is? Sociopolitical Claims and Corporate Political Activity

Do Firms Put Their Money Where Their Mouth is? Sociopolitical Claims and Corporate Political Activity

Corporate Political Activities and the SEC's Oversight Role in the IPO Process

AbstractWe study how a regulator (Securities and Exchanges Commission; SEC) responds to IPOs that have a higher political profile. We find that IPOs with issuers (intermediaries) that actively pursue political strategies receive more (less) SEC comment letters than IPOs without such actors. Cross‐sectional analysis reveals that the IPO's political environment moderates the relationship between social pressure for more corporate transparency and SEC scrutiny. Additional tests indicate that the political activities of issuers (intermediaries) contribute to a less (more) efficient IPO process. Overall, our findings suggest that politically active intermediaries have stronger incentives to accurately portray the IPO financial reporting environment than politically active issuers because they have greater reputational and political capital at stake; quite simply, the former have more to lose. We draw out the implications for theory, in terms of agency and reputation.

Does the government procurement market favor corporate social responsibility in a weak institution? Evidence from China

This study investigates, in the context of a weak institution, the single and interactive effects of firms’ nonmarket strategies in China’s government procurement market. Based on transaction cost and signal theory, using data pertaining to Chinese government procurement contracts from 2016 to 2018, this study also provides evidence that superior corporate social responsibility (CSR) performance enables firms to obtain more government procurement contracts. However, the effect is only significant in non-state-owned enterprises. Considering the interaction effect of corporate political activity (CPA) and CSR in business to government (B2G) markets, this study finds that CPA, characterized by the political attributes of executives, enhances the signal effect of CSR in B2G markets. Further heterogeneity analysis indicates that CSR’s signal effect diminishes over time and is enhanced with high industry competition. Our findings provide new insights on nonmarket mechanisms (such as CSR), through which firms competing in China’s B2G market can compensate for the weak institution.

Corporate Political Activity, Reimagined: Revisiting the Political Marketplace

We update the literature on corporate attempts to influence political actors, and thereby shape their governmental outcomes. Doing so allows us to recognize where the field has advanced, where it has not, and, importantly, reimagine an agenda for research moving forward. Our review documents areas of research and levels of analyses within the literature and identifies a core and secondary issues including the overrepresentation of lobbying and campaign contributions, the U.S. context, legislatures as targets of CPA, and firm policy and financial outcomes. We use the review to update the conceptualization of the political marketplace, including the introduction of a new categorization of corporate political activity tactics (CPA) along the dimensions of formality and directness. What we call our political marketplace 2.0 then allows for an expanded agenda for research in the field, moving forward. Our review works together with a companion review on Corporate Political Connections, published in this same issue, to offer a holistic perspective on the boundary between corporations and political actors.

Corporate Political Activity and Firm Performance: The Moderating Effects of International and Product Diversification

Prior research has found that corporate political activity (CPA) can both positively and negatively impact firm performance. Combining agency theory with the resource-based view, we examine the relationship between domestic lobbying (a key form of CPA) and firm performance by explicating the moderating effects of international and product diversification. We argue that expansion into international and product markets increases a firm's resources and reduces agency costs in domestic lobbying. Our results, based on a sample of 737 firms, show that lobbying is positively associated with performance for firms that are diversified in both international markets and along product-lines; whereas lobbying is counter-productive for purely domestic and undiversified firms. Our results contribute to the literature on the firm performance implications of corporate political activity by highlighting the roles of international and product diversification.

Corporate Political Connections: A Multidisciplinary Review

Corporate political connections (CPCs)—ties that firms forge with political actors—directly affect firms, political actors, and various stakeholders in societies. This topic has been studied extensively in multiple disciplines, including management, economics and finance, political science, and sociology. However, this body of research remains rather fragmented within the confines of each discipline or field, and synergies in theoretical and empirical domains remain underexploited. Differences between CPCs and other forms of corporate political activities are also often unclear. This article develops a focused, comprehensive, and theoretically deep review of the rapidly growing but disparate literature on CPCs in multiple disciplines and fields and distinguishes, compares, and connects multiple, heterogeneous theoretical perspectives that have been adopted in these different literatures. By conducting an extensive literature search of the articles published between 1990 and 2020 in 24 leading peer-reviewed journals in management, economics and finance, political science, and sociology, we build our review framework by organizing the reviewed articles into three groups of topics based on their logical connections: the conceptualization of CPCs, the antecedents of CPCs, and the outcomes of CPCs. Within each group, we distinguish two primary angles—the firm and the political actor—that correspond to the two entities joined by CPCs. On the basis of this framework, we identify major gaps and suggest avenues for future research. Our review works together with a companion review on corporate political activity, published in this same issue, to offer a wholistic perspective on the boundary between corporations and political actors.

The demands of populism on business and the creation of “corporate political obligations”

Populism is an ideologically fluid political vehicle which increases political risk and forces firms to adapt. As populist parties claim to speak exclusively for the people, any activities that could be perceived as going against populist ideals or leaders are problematic from the corporate point of view. These obligations need not require firms to actively support the populist party or to champion causes dear to the populists, as they may simply expect that firms refrain from challenging the status quo. But these expectations can alter firm operations and planning, particularly intangible activities such as corporate social responsibility, making a firm divert resources away from what it may desire to compete in the economic marketplace and forcing it instead to compete in the social and political marketplace. In this paper, we explore these obligations imposed on firms and term them corporate political obligations (CPO), a specific type of corporate political activity but one which is imposed from the outside. Through our examination, we find that CPO is the dark side of stakeholder capitalism, with states utilizing power to claim rights within the marketplace that are not theirs to claim.