Lobbying Behavior Research Articles

Uncovering lobbying strategies in sustainable finance disclosure regulations using machine learning

PurposeWe analyse lobbying behaviour by using Machine Learning approaches. In the context of Sustainable Finance Disclosure Regulation (SFDR), we gain detailed insights, assign these to existing strategies, and measure how strongly which participant influences the regulation. Study design/methodology/approachWe use tri-gram analysis, sentiment analysis, and similarity analysis as methods to obtain insights into the political commentary process of European Supervisory Authorities (ESAs) drafts dealing with SFDR. FindingsOur metadata helps to identify stakeholders and lobbying strategies. We found that the most negative comments came from the regulated, who argued strongly subjectively in a very objective environment of ESG disclosure. We also identified typical lobbying strategies based on arguments, persuasion, and classic cost-benefit considerations. Originality/valueWe generate emotion values and synthesise detailed argument differences and show that modern algorithms can contribute to the identification of interest groups and lobbying strategies. Furthermore, we generate similarity values of arguments that can be taken into account in the analysis of the success of a lobbying strategy.

The economic consequences of IFRS 16 adoption: the role of gearing restriction in debt covenants

PurposeThis study aims to examine the economic consequences of, and managerial behaviour in response to, the introduction of IFRS 16 Leases. It extends the debt covenant hypothesis to explain why firms reduce the use of operating leases with the introduction.Design/methodology/approachThis study develops a model, based on operating leases as an alternative financing source and the determinants of debt policy, to estimate the effects of gearing on operating lease intensity. High gearing is a proxy to probably closer to the violation of, or expected to violate, the gearing restriction in debt covenants given the retrospective capitalisation of operating leases, when IFRS 16 takes effect.FindingsThis study finds that operating lease intensity fell between 2011 (immediately after the first exposure draft leading to IFRS 16) and 2018 (immediately prior to the effective date of IFRS 16). It also finds that gearing affects changes in operating lease intensity over 2011 and 2018, consistent with the debt covenant hypothesis.Research limitations/implicationsThe introduction of IFRS 16 is a natural experiment with unique characteristics (the active lobbying behaviour, ex ante evidence on adverse economic consequences, a prolonged standard-setting period, etc.) valuable for accounting research.Practical implicationsA showcase about the relevance of financial reporting for contracting interests of firms and managers and a good reference for accounting standard setters in considering and managing the economic consequences of proposed accounting standards.Originality/valueThis study adds to the limited research on the consequences of accounting standards and documents the ex-post impact on firm leverage ratios and the behavioural aspects of reporting entities.

Personal Branding on Instagram: Visual Framing Analysis on The West Java Governor Candidates Online Campaign

In 2018, it was one of the most important year in Indonesia, all Indonesian people celebrate the moment of the election, in every aspect. They can choose Governor, Mayor, and Regent. One of the area that participate in this moment, is West Java. This area is one of the most important and crucial in the election process because West Java has the highest votes compare to other area in Indonesia. West Java run the election for choosing the Governor position in 2018, and this become a unique point of interest because West Java has unique candidate, and becomes magnet to the people in that area that participate in the election event. One other consideration why this event becomes more interesting because west java has an important role in Indonesian Government, because this area has the largest population. Apart from political lobbying behaviour, and political interference, each Governor candidate that runs in this election event, should has a unique set of strategic communication in their goals to rise their awareness and electability in front of the west java’s audience. To get a better results in electability variable, they should has a good personal branding to communicate the positive value to their supporters and the audience. According to Montoya, personal branding can set or help the audience build a perspective to someone combine with a organic storytelling and the perspective was built naturally inside the mind of the audience (2002;27). One of many ways to build perception is to framing they self with the image that they want to deliver in front of the people so they can have achieved the political campaign goals. visual framing is crucial when it comes to managing key audiences’ impressions, gaining legitimacy and securing competitive positioning (Meyer et al., 2013). One of the platform to help achieve a good visual framing is through Social Media, Instagram. Instagram as one of the most popular media in Indonesia, hold major key role in moulding a good perception and perspective in people’s mind about each candidate in West Java Governor Election. With this framing and analysis content approach in each Instagram Visual, as the results is the themes about visual framing that want to be communicated as part of strategic communication personal branding from four candidate West Java Governor election, such as Ridwan Kamil, Sudrajat, Deddy Mizwar and Tubagus Hasanuddin.

An examination of comment letters concerning an increase in audit exemption thresholds. Evidence from Finland

ABSTRACT This study examines how interest groups have reacted to the suggested increase in the audit exemption thresholds in Finland. The results suggest that the lobbying opponents objected to the increase because of the benefits gained from the auditing of financial statements. Considerable reliance is placed on the audited accounts of Finnish small firms in maintaining societal functionality. Hence, the results are supported by the public interest theory. In contrast, the comment letters that supported the increase highlighted the need to follow international trends. The findings of the lobbying behaviour suggest that the interest groups collected information and strategically transferred it to the ministry with the objective of influencing the regulatory outcome. To conclude, this study contributes to a more detailed understanding of the role that the key arguments both for and against the proposed regulatory change played in the case of increasing the audit exemption thresholds. Finally, this study joins existing lobbying literature and contributes to this stream of research by shedding light on the importance of the argumentation strategies used in the Finnish case.

Partisan polarization and corporate lobbying: information, demand, and conflict

How do political environment and organization characteristics combine to impact lobbying behavior? I answer this question using a time series analysis of an original dataset comprised of corporate lobbying disclosure reports, made available through the Lobbying Disclosure Act of 1995. I theorize that polarization will drive increases in lobbying efforts toward Congress in particular, due to the increasing challenges of legislating under such conditions. The findings indicate that polarization does appear to increase lobbying in Congress, while firm wealth, combined with constituency-based connections to members of Congress, decreases lobbying efforts, perhaps due to increased efficacy of efforts (quality over quantity). These findings, when paired with recent evidence regarding the relationship between leadership and non-leadership members of Congress, suggest that lobbyists may be becoming an increasingly integral source of information for members of Congress who do not hold leadership positions.

“Exit” vs. “Voice”: Global Sourcing, Multinational Production, and the China Trade Lobby

AbstractThis paper examines the influence of three different forms of global economic engagement on the lobbying behavior of US businesses with regard to trade relations with China: (a) input sourcing; (b) downstream export; and (c) vertical foreign direct investment. It will be hypothesized that firms involved in all three forms of global economic activities should have incentives to lobby over China-related trade issues in order to maintain unimpeded access to sources of supply or markets and to ensure the smooth operation of the entire supply chain. Going further, drawing on the exit-voice framework developed by Albert Hirschman (1972), it will be argued that compared to firms in those industries mainly involved in input sourcing from China, American multinational corporations that have verticalized their production should have even stronger incentives to engage in lobbying activities and “voice” their policy preferences due to their greater “sunk costs” and hence the higher cost of “exit.” Statistical analysis of the China trade-related lobbying activities of US firms between 2006 and 2016 lends substantial support to these conjectures.

Who gets all the PIE? Regulation of the statutory audit for private UK companies

PurposeWhile recently introduced EU regulation on the statutory audit of public interest entities (PIEs) aims to improve audit competition and quality, its success and impact depends on the definition of a PIE applied across the various EU Member States. In the UK, even though little is known about their auditing choices, these changes will not apply to most private companies despite their importance to the wider economy. The purpose of this paper is to provide an in-depth analysis of the private company audit market and examine the lobbying behaviour of the accounting profession around the definition of a PIE in the UK.Design/methodology/approachUsing a large panel of independent private company audits in the UK and a textual analysis of submitted comment letters to a government consultation on the new regulation, this paper presents a comprehensive analysis of the audit market for private companies by measuring supplier concentration using four different measures of market share, and of the lobbying behaviour of the accounting profession.FindingsThere are two main findings. First, the private company audit market is characterised by low auditor switching rates along with a tight oligopoly of the largest independent private company audits maintained by the Big Four audit firms. Second, the lobbying behaviour of accounting and audit firms sought, and succeeded, to limit the scope of the definition of a PIE in the UK, consistent with the theoretical predictions of monopoly capitalism and the theory of professions.Originality/valueThe paper shows that the definition and scope of a PIE needs revisiting both within the UK and across all EU Member States, with a view to including more of these economically important private companies and highlights the policy challenge of increasing competition and choice in a concentrated audit market.

Identifying lobbying strategies: An analysis of public responses to the Productivity Commission Inquiry into executive remuneration in Australia

This study investigates lobbying behaviour over the two phases of the 2009 Productivity Commission Inquiry into executive remuneration within Australia. Consistent with expectations, behaviours appeared related to preference for change, the costs of regulatory change relative to those of lobbying, and the need for reputational capital. Industry participants, and those from the Representative and Professional bodies emerge as key opponents. Industry presented in a conciliatory manner during the first phase, revealing a preference for the status quo, but then directly targeted specific recommendations of concern, notably the ‘two strike’ and ‘no vacancy’ rules in the second phase. Respondents from the Representative and Professional Bodies were broadly and consistently supportive of change and the Inquiry’s final recommendations. We also find that these recommendations largely align with the views of the Representative Bodies, but conflict with those expressed by Industry in their second phase submissions. Finally, we find no evidence to suggest the motivation behind Industry lobbying related to poor remuneration practices.

Norm entrepreneur lobbying and persuasion: A case study involving the IASB's modification of an exposure draft

The dynamics of IFRS are a significant influence on regulators and accounting standard setters in many countries. Many previous studies on accounting standard setting have focused on comment letter submissions and analyzed the relationship between lobbying behavior and lobbyists’ attributes (e.g., Larson, 2008). However, how and to what extent each actor can participate effectively in the IASB's standard-setting process has not been thoroughly studied. This case study deals with this issue and contributes to the literature by introducing the theoretical perspective of norm entrepreneur actions during accounting standard setting. It investigates a case involving the modification of an IFRS exposure draft that did not reflect Japanese opinions. This study identifies two factors that appear to be crucial in relation to the IASB's final decision: the actions of Japanese norm entrepreneurs and their analogical persuasion.

Determinants of corporate lobbying intensity in the lease standard-setting process

The highly controversial lease standard-setting project that will replace the standards currently in place, establishes a new approach that includes the recognition of all assets and liabilities associated with lease contracts on the balance sheet, regardless of their classification. The complex standard-setting process and the heated debate among stakeholders makes the analysis of the lobbying phenomenon an important matter for study. The aim of this paper is to find explanatory factors that predict the behaviour of corporate groups with respect to the lease standard-setting process. To achieve this objective, we scrutinize the submission of comment letters by 306 non-financial listed companies in response to the discussion paper (DP 2009) and two exposure drafts (ED 2010 and ED 2013) elaborated jointly by the IASB and the FASB by distinguishing among three degrees of intensity in lobbying activities, depending on participation in the different discussion periods. Our empirical study is conducted through a multivariate analysis that shows the intensity of lobbying by considering participation in the three consultation periods. The results show that the intensity of lobbying is associated with size, profitability, age, industry and managerial ownership. The evidence can be used to predict lobbying behaviour. The research has implications for standard setters and contributes to prior lobbying research.

Arab Gulf lobbying in the United States: what makes them win and what makes them lose and why?

This research looks at attempts by Arab Gulf states to lobby the US government effectively. It explores aspects of their lobbying behaviour in order to identify the factors that lead to success and those that lead to failure from their lobbying endeavours. In this respect, it utilizes two case studies: one in which Arab Gulf state lobbying was successful, and another in which lobbying failed. For each case study, the different elements involved in lobbying are analyzed and factors that lead to success as well as to failure are inferred. In tandem with an analysis of the strategies, or lack of them, behind Arab Gulf states’ lobbying, the research examines additional relevant factors such as the organization and activism of the US Arab American community, the strategic value of the Arab Gulf to the United States, and the negative image of Arabs in America. The research considers the obstacles facing the establishment of an effective Arab Gulf lobby in the United States, mainly the absence of a grassroots base of Arab Americans that is committed to foreign policy issues.

Inside versus outside lobbying: How the institutional framework shapes the lobbying behaviour of interest groups

AbstractDifferent types of interest groups use different lobbying strategies. This article presents an investigation of this already well‐established hypothesis once more, but additionally proposes that the institutional framework of the country in which interest groups operate also influences their lobbying behaviour. More specifically, it is shown that groups working in the interest of the public are better integrated into the policy‐making process when direct democratic instruments, such as referendums, occur regularly (as in Switzerland) than when referendums are the exception (Germany). The article demonstrates that Swiss cause groups – often also referred to as ‘public interest groups’ in the literature – use a more balanced mixture of insider and outsider strategies than their German peers, but also that this moderating effect cannot be found for specific interest groups, such as industry groups or unions.

Two logics of NGO advocacy: understanding inside and outside lobbying on EU environmental policies

ABSTRACTContributions by non-governmental organizations (NGOs) to European governance supposedly enhance participatory democracy. It matters for this democratic surplus how NGOs foster relationships to both policy-makers and publics by engaging in inside and outside lobbying on European Union policies. This article investigates the factors that explain this lobbying behaviour. It contrasts organization-level hypotheses on the NGOs’ relational and resource characteristics with issue-level hypotheses on the complexity, salience and beneficiary group of the policy issue. Expectations are formulated under the assumption that different logics of influence and reputation drive inside and outside lobbying by NGOs. The findings suggest that issue-level characteristics have more explanatory power than organization-level factors. More salient, less complex issues and issues involving a public good have significantly higher odds of outside lobbying, while public goods attract less inside lobbying. The logic of reputation seems to capture outside lobbying, while the logic driving inside lobbying remains more puzzling.

Lobbying on the integrated reporting framework

Purpose – The purpose of this paper is to examine formal participation in the early phase of the International Integrated Reporting Council’s (IIRC’s) standard-setting. The objective of the paper is to shed light on the characteristics of lobbying parties and the determinants of their lobbying behavior toward the IIRC. Additionally, the most important points of contestation regarding the IIRC’s initial proposal for integrated reporting are identified and discussed. Design/methodology/approach – The authors analyze comment letters issued toward the IIRC’s 2011 discussion paper on the basis of a content analysis. The analysis is guided mainly by Sutton’s (1984) rational-choice model of lobbying and by findings from extant financial accounting lobbying research. The analysis of the data is both quantitative and qualitative. Findings – The paper improves the understanding of the political nature of standard-setting in the context of integrated reporting. Among other things, the authors find that comment letters toward the IIRC’s discussion paper are mainly written by large multinational firms (as opposed to small- and medium-sized ones) and by preparers (as opposed to users). The authors also observe active lobbying by sustainability service firms and professional bodies which tend to take a critical position vis-à-vis the discussion paper’s emphasis on investor needs and shareholder value creation. Moreover, the qualitative analysis reveals that respondents voice different concerns regarding, for instance, the scope of audience of integrated reporting, issues of materiality and the relationship between integrated reporting and other existing reporting frameworks. Research limitations/implications – The analysis is limited to a consideration of the 2011 discussion paper of the IIRC. The IIRC’s more recent and forthcoming proposals will likely provide a basis to extend the paper’s findings and allow investigation of the role of lobbying for the further development of the framework. Originality/value – The paper is, to the best of the knowledge, the first one to explore lobbying behavior by means of comment letters in the context of integrated reporting.

Electric utilities and American climate policy: lobbying by expected winners and losers

AbstractWhen and why do individual companies lobby on environmental policies? Given the structural strength of business interests, the answer to this question is important for explaining policy. However, evidence on the strategic lobbying behaviour of individual companies remains scarce. We use data from lobbying disclosure reports on all major climate bills introduced during the 111th Congress (2009–2010). We then link the lobbying disclosure reports to detailed data on the fuel choices of all electric utilities in the United States along with socioeconomic, institutional and political data from the states where the utilities operate. The expected winners (renewable energy, natural gas users) from climate policy are much more likely to lobby individually on federal legislation than the expected losers (coal users). We find that expected winners lobby for specific provisions and rents as a private good, whereas expected losers concentrate their efforts on collective action through trade associations and committees to prevent climate legislation. The results suggest that the supporters of climate policy believed the probability of federal climate legislation to be nontrivial.

Lobbying Behavior of Governmental Entities: Evidence from Public Pension Accounting Rules

We examine the lobbying behavior of state governments in the development of recently issued public pension accounting standards GASB 67 and 68. Consistent with opportunistic motivations, we find that states’ opposition to the liability increasing provisions embedded in these standards is increasing in the severity of pension plan underfunding, state budget deficits, and the use of high discount rates. Further we find opposing states are subject to more stringent balanced budget requirements and greater political pressure from unions. By contrast, we find evidence that the support from financial statement users for these provisions is amplified in states with poorly funded plans and large budget deficits, suggesting government lobbying is misaligned with a public interest perspective. We also find evidence that user support varies by type: internal users (public employees) overwhelmingly oppose the standards, relative to external users (credit analysts and the broader citizenry) but the difference is moderated in states with constitutionally protected benefits. This finding is consistent with the expectation that pension accounting reform will motivate cuts in pension benefits as opposed to increased levels of funding from the governments. Analyses of 2011 and 2012 state pension reforms confirm that states opposed to accounting reform are more likely to cut pension benefits.

Responsiveness or Influence? Whom to Lobby in International Climate Change Negotiations

Abstract This article analyzes the lobbying behavior of nongovernmental organizations (ngos) during international climate change negotiations.2 With limited resources, these ngos need to strategically invest their resources to maximize impact. A key decision concerns the target of lobbying efforts: Whom do ngos lobby, and why? Two possible explanations are contrasted: influence and responsiveness. Accordingly, ngos can focus on responsive targets that are likely to bring ngo input to the table or they can focus on influential targets whose voice is heard at the negotiation table. These two explanations are tested using data from a survey of ngos active in international climate change negotiations. I find that ngos strategically target their lobbying efforts, approaching both responsive and, more importantly, influential delegations. However, given that ngos primarily contact their home delegation, as well as the president of the negotiation session, further information on the nature and content of contacts between ngos and government delegations is necessary for understanding ngo-government interactions in international climate change negotiations.

Multilevel ‘venue shopping’: The case of EU’s Renewables Directive

Lobbying has traditionally been an enterprise of national interest organizations, which chiefly seek to influence national actors, especially governments. However, studies find that national interest organizations increasingly also target the European Union (EU). As the EU agenda has increased in depth and scope, interest organizations at national and EU political levels might be expected to align in coalitions in order to influence EU legislation. Such strategies potentially increase interest organizations’ political leverage significantly; despite that, lobbying coalitions consisting of organizations aligned to different political levels have been scantily studied in the literature on EU lobbying. Therefore, the first aim of the article is to illustrate a case where coalition lobbying is highly likely: the lobbying strategies employed by the interest organizations of Germany’s energy industries in the process leading up to the EU’s Renewable Energy Directive. These industries are represented by several organizations at both the national and the European level. The second aim of the article is an investigation into how the Renewables Directive came about, as the outcome has profound impact on power production and consumption, and future prospects for EUs mitigation of greenhouse gases. Large controversy was connected to the legal proscriptions of support mechanisms for enhancing renewable energy production in particular. Two of the organizations that would be the most severely affected by the Renewables Directive were the European utilities industry and renewables industry, together constituting all power producers and their affiliates in Europe. The utilities and renewables industries disagreed deeply on core issues, such as legislation on support mechanisms for expanding production of renewable energy in the EU. The utilities industry favored an EU-wide green certificate scheme, whereas the renewables industry pressed for national choice of support mechanisms. Because the stakes were high, both had large incentives to invest substantial resources into lobbying on this legislation. The third aim of the article is to discuss what such multilevel lobbying reveals about perceptions of where real decision-making power is located in the EU. Energy policy is traditionally a strong national domain, which makes the governance theory of liberal intergovernmentalism (LI) relevant to use. However, as the EU is increasingly expanding its legislation on energy issues, the multilevel governance theory (MLG) also might describe how interest organizations perceive power to be located when EU legislation is formulated.The results indicate that despite all lobbying that organizations targeted toward the German government, which played a key role in the negotiations, the observations of the lobbying behavior is still better described by MLG than LI; the limited leverage of LI is illustrated by three points. First, all the German interest organizations lobbied institutions at both the national and at the EU levels. Second, national and European interest organizations participated in informal multilevel political coalitions consisting of a broad church of actors, as regards the renewables industry in particular. By coordinating political positions, pooling resources and developing common strategies, the interest organizations probably increased their leverage substantially, not the least because these coalitions also were backed by governments in key member states and members of the European Parliament. Third, all the EU-level interest organizations lobbied both the core EU institutions and central national governments. Summing up, these findings suggest that multilevel strategies should be considered for inclusion in analyses of national and European-level interest organizations’ lobbying of EU legislation. The interest organizations themselves seem to see power as distributed across multiple levels of governance, and lobby accordingly. In order to grasp momentum of the lobbying process, it is moreover often probably relevant to assess coordination of strategies between interest organizations at different levels in complex multilevel advocacy coalitions. By demonstrating that all organizations covered, regardless of sizes and resources, lobbied at multiple governance levels, this study also nuances the picture of which actors participate in EU policymaking. When legislation on crucial issues is created, small national interest organizations might also target EU institutions. Finally, at least one national interest organization cooperated with private companies to share tasks and enhance lobbying strength. Such cooperation between an interest organization and its private members is a relevant topic of research in future studies on interest organizations.

In search of political influence: Outside lobbying behaviour and media coverage of social movements, interest groups and political parties in six Western European countries

Outside lobbying is a key strategy for social movements, interest groups and political parties for mobilising public opinion through the media in order to pressure policymakers and influence the policymaking process. Relying on semi-structured interviews and newspaper content analysis in six Western European countries, this article examines the use of four outside lobbying strategies – media-related activities, informing (about) the public, mobilisation and protest – and the amount of media coverage they attract. While some strategies are systematically less pursued than others, we find variation in their relative share across institutional contexts and actor types. Given that most of these differences are not accurately mirrored in the media, we conclude that media coverage is only loosely connected to outside lobbying behaviour, and that the media respond differently to a given strategy when used by different actors. Thus, the ability of different outside lobbying strategies to generate media coverage critically depends on who makes use of them.

現代ロシアの市民社会

This paper attempts to clarify the political behavior of non-governmental and non-profit organisations in modern Russia based on a questionnaire-type survey carried out from December 2003 to March 2004 in Moscow and St. Petersburg. The survey was designed by Prof. Yutaka TSUJINAKA (University of Tsukuba), Prof. Itsuro NAKAMURA (University of Tsukuba), and Prof. William Smirnov (Institute of State and Law, Russian Academy of Sciences) with an aim to analyze the relationship between non-profit organisations and political actors: the central and local governments, political parties, politicians, the mass media, and others. The questionnaire is called the “Japan Interest Group Survey” (JIGS), because it was initially designed to determine the situation with interest groups in Japan. Since then, it has been developed into a global research project, conducted in 15 countries. Russia is among these countries in a similar survey form. In this paper, I examine the political behavior of Russian organisations using JIGS data. Many scholars have analyzed Russian civil society from multiple angles after the collapse of the USSR, based on the assumption that civil society would develop smoothly under a new political system. However, NPOs and NGOs did not grow as expected, because “marionette organisations” controlled by the government dominated Russian civil society. These organisations receive grants from the government directly or indirectly, and in many cases they are managed by retired government officials. Also, these organisations invariably support the government and often participate in government-sponsored conferences as “civil society representatives.” Researchers have claimed that such organisations do not contribute to the development of the civil society, whereas organisations opposed to the government depend largely on donations from abroad. Furthermore, scholars have demonstrated that the Russian people rarely trust outside organisations and systems, but tend to trust personal networks with relatives, friends, and acquaintances. This is seen as one of the reasons why the Russian people tend not to participate in NPO activities. As a result, it is the accepted view that Russian civil society is weak owing to weak NPOs and NGOs. While I recognize that Russian civil society is quite different from civil society in the developed Western countries, it is still important to analyze the actual situation of NPOs in Russia, where there were 85,185 “non-profit organisations” and 108,736 “public associations” in 2012. It is safe to assume that these organisations have some influence on Russian politics, and the question of their lobbying behavior remains open. Thus, I consider here the subjective influence of these organisations on problem-solving, the proposal or altering of policies, the frequency of their contact with administrations and political parties, political activities during elections, and lobbying methods. It is beyond the scope of this paper to address all the questions and responses to the questionnaire-survey, but I attempt to discuss the organisations’ political actions based on the above six points. In conclusion, I found that Russian organisations are very confident in problem-solving in their working areas and that they succeeded in proposing or altering policies more often compared to similar organisations in other countries. They have frequent contact with administrations, especially locally, and they often engage in exchanges of opinion. On the other hand, the organisations do not have close contact with political parties and do not participate in political campaigns during elections. Also, the organisations prefer the outside lobbying method (through mass media, demonstrations, etc.) to inside lobbying (through the politicians, political parties, administrations, etc.).