Corporate Political Strategy: Explaining How National Variations in Institutional Competences Determine Venue Choice

Large corporations have both the resources and motivation to actively engage in the policymaking process, with the goal of shaping aspects of public policy that may affect them. The choice of institutional venue for this activity is determined by the resources available to the corporation and by specific national distribution of policy making competences. In contrast, the intensity of lobbying is a function of firms’ demand for action/inaction by policy makers as well as the quality of the relationship with these policy makers. We asses these arguments with survey data on 79 large corporations across the three largest Western economies: the United States, Germany, and the United Kingdom. The results show that the distribution of corporate lobbying across venues reflects national variation in the distribution of decision making powers. In particular, in the US, firms place significantly more emphasis on lobbying their bureaucracy compared to firms in Britain and Germany. With respect to the frequency of total lobbying, the key drivers for this activity are the quality of firms’ relationship with policymakers and their attitude to regulation affecting their operations. Overall, these findings show that, firstly, the logic of corporate political action operates similarly in different political systems and that, secondly, firms adapt their political strategy to the institutional environment in which they operate.