Firm Lobbying Research Articles

Political geography and corporate political strategy

We examine the relationship between political geography and corporate political strategy by considering lobbying expenditures. We find that firms increase their lobbying intensity when local politicians cannot provide a direct link to the governing elite, i.e. when firm location on the political map shifts to an area that is not closely aligned with the president. Our results indicate that firm lobbying is a means for exerting influence on political power and is primarily geared toward building valuable political capital in order to exploit short-term opportunities. Lobbying expenditures are a matter of expediency for politically active firms that tend to spend less on lobbying when there is an alignment of power and more when there is misalignment of power. We also find that more sophisticated, better informed institutional investors recognize and/or encourage corporate political strategies that involve adjusting lobbying efforts in response to changes in political geography.

Firm lobbying and influence in developing countries: a multilevel approach

A large literature examines corporate political activity in the United States, but much less is known about firms’ lobbying activities and policy influence in developing countries. I argue that firm-level heterogeneity helps explain firms’ political behavior, while political institutions shape policymakers’ incentives to respond to business interests. The empirical analysis relies on the World Bank's Enterprise Survey, which covers over 20,000 firms operating in 42 developing and transition countries, to examine the determinants of lobbying and perceived policy influence. Multilevel estimates support the hypotheses that lobbying and influence increase with the firm's size and market power. Additionally, I find that firms report greater policy influence in democracies than in non-democracies.

The Dynamics of Firm Lobbying

How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confirmed in studying how firms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its influence on firm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made. (JEL D22, D72, D78, L21)

Firm Lobbying and EU Trade Policymaking: Reflections on the Anti-Dumping Case against Chinese and Vietnamese Shoes (2005–2011)

It is an accepted view in the trade policy literature that those who lose from external trade are much more easily mobilized politically than those benefiting from it. As a consequence, the argument goes that there is an overrepresentation of protectionist interests in the political arena and a persistent pressure on policymakers to shield their markets from foreign competition. However, I argue that under certain circumstances, importdependent firms may very well be able and willing to mobilize politically and defend their anti-protectionist trade interests in the political arena. I will use the recent European Union (EU) anti-dumping case against Chinese and Vietnamese shoes to illustrate my argument.

The Impact of National Business Cultures on Large Firm Lobbying in the European Union: Evidence from a Large-Scale Survey of Government Affairs Managers

This paper reports research into cross-national differences in corporate lobbying in the European Union (EU). Original data collected through an online survey, conducted between April and June 2010, of 132 government affairs managers in large firms are analysed to ascertain the extent their political activities are influenced by the national business cultures in which they were socialised. Findings indicate significant relationships between (1) respondents’ culturally-grounded attitudes towards time and their level of engagement with policy-makers, and (2) their culturally-conditioned attitudes towards power and hierarchy and their choice of political tactics when seeking to promote their political interests. Contrary to expectations, no significant relationship was found between respondents’ cultural preferences for acting autonomously or within a group, and their level of participation in the policy-making process. The research makes important contributions to the literature on Europeanization as well as to research into the internationalisation of corporate political strategising.

International Firm Lobbying and ED 8 Operating Segments

Exposure Draft 8 (ED 8) Operating Segments was introduced to replace the revised IAS 14 Segment Reporting and to align segment reporting requirements with their United States counterparts in SFAS 131. ED 8 proposed material changes in the identification, measurement and disclosure of corporate segment information. In response to the ED, there were 182 comment letters from various respondents including firms, professional associations, regulatory authorities and accounting firms. This paper investigates the influence of firm characteristics such as size, performance, and number of segments on firms’ lobbying position choices on ED 8. Results reveal that larger firms were more likely to lobby in favour of ED 8, and firms with two or fewer segments were more likely to lobby against ED 8. It also provides evidence that relatively profitable firms operating in an environment of low competition are less inclined to support ED 8.

Would Global Patent Protection Be Too Weak Without International Coordination?

This paper analyzes the setting of national patent policies in the global economy. In the standard model with free trade and social-welfare-maximizing governments a la Grossman and Lai (2004), cross-border positive policy externalities induce individual countries to select patent strengths that are weaker than is optimal from a global perspective. The paper introduces three new features to the analysis: trade barriers, firm heterogeneity in terms of productivity and political economy considerations in setting patent policies. The first two features (trade barriers interacting with firm heterogeneity) tend to reduce the size of cross-border externalities in patent protection and therefore make national IPR policies closer to the global optimum. With firm lobbying creating profit-bias of the government, it is even possible that the equilibrium strength of global patent protection is greater than the globally efficient level. Thus, the question of under-protection or not is an empirical one. Based on calibration exercises, we find that there would be global under-protection of patent rights when there is no international policy coordination. Furthermore, requiring all countries to harmonize their patent standards with the equilibrium standard of the most innovative country (the US) does not lead to global over-protection of patent rights.

Lobbying paradox of strategic export policy in a differentiated duopoly

This paper presents an analysis of lobbying based on imperfect competition by using three-stage game. It seeks to explain why lobbying efforts might be influenced by a home government’s viewpoint. Endogenously determined lobbying may distort the outcomes of strategic export policy, so that the results would differ from that generated by exogenously set lobbying. The lobbying paradox results in the domestic firm being worse off than if it could credibly commit to not engage in lobbying. Moreover, in the presence of foreign firm lobbying, the desired tax level is as the same as that of the benchmark case without lobbying.

Political costs and lobbying activity of Australian gold mining firms

This paper provides empirical evidence on the lobbying behaviour induced by political costs in the Australian gold mining industry. The Australian gold mining industry remained tax-exempt for nearly seven decades until 1 January 1991. Due to its rapid prosperity in the early 1980s, the industry came under intense political scrutiny in the mid- to late-1980s. In particular, in December 1985 a federal tax inquiry was commissioned which investigated the economic and social impact of removing the tax-exempt status of the industry. Using the voluntary submissions to the federal tax inquiry as a measure of lobbying activity, this study documents that gold mining firms’ lobbying positions were positively related to the quantity of recoverable gold reserves held by them and profitability of their operations. Results of this paper confirm findings in prior research that firm lobbying positions are consistent with the adverse economic consequences of regulatory changes

McConnell, Parties, and the Decline of the Right of Association

Election Law Journal: Rules, Politics, and PolicyVol. 3, No. 2 CommentariesMcConnell, Parties, and the Decline of the Right of AssociationRobert F. BauerRobert F. BauerSearch for more papers by this authorPublished Online:6 Jul 2004https://doi.org/10.1089/153312904322907711AboutSectionsPDF/EPUB Permissions & CitationsPermissionsDownload CitationsTrack CitationsAdd to favorites Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail FiguresReferencesRelatedDetailsCited byDoes it pay to lobby? Examining the link between firm lobbying and firm profitability in the European Union30 September 2020 | Journal of European Public Policy, Vol. 28, No. 12 Volume 3Issue 2Jun 2004 To cite this article:Robert F. Bauer.McConnell, Parties, and the Decline of the Right of Association.Election Law Journal: Rules, Politics, and Policy.Jun 2004.199-204.http://doi.org/10.1089/153312904322907711Published in Volume: 3 Issue 2: July 6, 2004PDF download

The Structure And Conduct Of Corporate Lobbying: How Firms Lobby The Federal Communications Commission

lobbying (internal organization vs. trade association) by firms in administrative agencies. It explores the power and limitations of the collective action theories and transaction cost theories in explaining lobbying. It introduces a dataset of over 900 lobbying contacts cover 101 issues at the Federal Communications Commission (FCC) in early 1998. We find that the structure and conduct of large firm lobbying at the FCC is consistent with the predictions of theories of transaction costs and the main results of theories of collective action. However, large firms do not change their behavior drastically as structures arise to remedy the free rider problem. Small firms show no sensitivity to collective action issues or transaction cost issues in the organization or amount of their lobbying, but they do lobby less when having to reveal proprietary information. In sum, large firms behave largely consistent with theoretical predictions, while small firms do not.

Lobbying by Law Firms: A Study of Lobbying by National Law Firms in Canberra1

This article examines the way in which national law firms lobby the federal government from their Canberra offices. It is based on extensive interviews with lobbyists from those law firms, other commercial lobbyists in Canberra and legal professional bodies. The article begins by establishing the unique nature of law firm lobbying. In particular, it looks at the technical skills law firm lobbyists possess, their access to specialist legal knowledge and their preference for administrative, over political, lobbying. The development of law firm lobbying is then discussed. This centres around changes to the legal profession, federal business laws and federal government decision‐making. The article concludes by suggesting that law firm lobbying both reflects and stimulates changes in government decision‐making and will grow in importance as the legal profession in Canberra grows.

A case study of accounting firm lobbying: Advice or consent

There is a rather long-standing supposition that clients' preferences for proposed accounting standards or rules have a degree of influence on accounting firms' positions in support or opposition to adoption of those standards or rules. Previous tests of this supposition, labelled the “client effect” in this paper, have produced inconclusive results. This paper reports the results of a test of a more refined measure of client effect in the context of a single instance of accounting firm lobbying: that on SFAS No. 86. Results indicate a very strong association between positions advocated by clients and their respective accounting firms when the client positions are weighted by a measure of lobbying effort. Analysis of client and accounting firm comment letters did not reveal that an association existed in the structure of their respective arguments. Analysis of post-lobbying behaviour by clients suggests that the direction of influence is from client to accountant, which raises serious ethical questions given the auditor's obligation to be objective particularly with respect to intellectual honesty.

Toward a More General Theory of Regulation

Toward a More General Theory of Regulation