Institutions and Corporate Lobbying
Description
“Institutions and Make-or-Buy Decision of Lobbying: The Role of Sociopolitical Legitimacy on Foreign MNEs’ Lobbying Internalization”
In this study, I examine how legitimacy comes into play in foreign MNEs’ make-or-buy decisions regarding lobbying. Lobbying is a socially interactive process. In other words, the type and degree of reciprocal interaction is defined by the relationship between two parties involved in lobbying. In particular, prior literature suggests that the legitimacy of firms is critical in the lobbying process. This is due to the fact that firms try not only to communicate with but also to exert influence on politicians whose primary interests are to get elected or reelected; as such, interacting with illegitimate or less legitimate players will penalize elected politicians in the upcoming election. Furthermore, lobbyists play a pivotal role as mediators between firms and elected politicians. As their future careers depend on how elected politicians view them, lobbyists are less likely to be associated with firms viewed as less legitimate. Hence, I argue that foreign MNEs from less democratic countries are less likely to be able to lobby elected politicians through their inside lobbying functions than those from more democratic countries. Furthermore, it would be more challenging for those from less democratic countries to internalize capable lobbyists, which makes these firms less likely than those from more democratic countries to have an inside function. Preliminary results strongly support my arguments. I have completed the data analysis for this paper, which is in the writing stage.
“Corruption and Lobbying: The Degree of Home-Country Corruption and the Political Behaviors of Foreign MNEs in the United States”
In this paper with Jordan Siegel, we explore institutional drivers of the lobbying of foreign multinational enterprises (MNEs). It is widely known and accepted that home country institutions regulate the behaviors of multinational enterprises in foreign countries. However, most literature on foreign MNEs and institutions has focused on how the cultural or institutional distance of home country institutions shapes initial foreign entry, foreign direct investment (FDI), and entry mode. Much less attention has been paid to how home country institutions regulate everyday operations of foreign MNEs, particularly their political behaviors. Therefore, in this paper, we examine how different levels of corruption in the home country influence the political engagement of multinational enterprises. Findings suggest that firms from countries that rank as suffering from higher levels of corruption, based on Worldwide Governance Indicators and the Heritage Foundation’s index of freedom measures, are less likely to engage in lobbying after controlling for country characteristics, such as economic ties between the United States and a focal foreign country. We have completed the data analysis and are working to produce a first draft of the paper.
“Culture and Lobbying: Country Egalitarianism and Foreign MNEs’ Political Adaptation in the United States”
This paper examines the culture and political behaviors of foreign MNEs in the United States. Specifically, I (with Jordan Siegel) seek to convey how culture influences and regulates foreign MNEs’ degree of political engagement in host countries. Culture has been the central tenet in international business to predict the behaviors of foreign firms. Thus, building on Schwartz’s foundational work on cultural indexes and Siegel’s prior empirical work on culture, egalitarianism, and harmony, we examine how culture influences foreign MNEs’ engagement of lobbying in the United States. Our statistical results strongly support theoretical predictions that foreign firms that come from a country with high levels of egalitarianism are more likely than those lower in egalitarianism to engage in lobbying. Specifically, foreign MNEs from countries with high levels of harmony, as well as cultural values that protect and preserve the status quo rather than change, are less likely than others to engage in lobbying. We are currently in the writing phase of this paper.