Corporate Political Activity: A Review and Research Agenda

Abstract

Corporate political activities, or corporate attempts to shape government policy in ways favorable to the firm, are commonly employed by firms across countries. We review recent scholarly work from management, political science, economics and sociology in the area of corporate political activity (CPA), paying particular attention to the literature published since Shaffer’s [Shaffer, B. 1995. Firm-level responses to government regulation: Theoretical and research approaches. Journal of Management, 21: 495–514] review. To integrate this literature we provide a model of the antecedents of CPA, the different types of CPA, how firms organize to implement CPA and the outcomes of CPA both for public policy and firm performance. We conclude our review by proposing an agenda for future research in the area.

Corporate political strategy and liability of foreignness: Similarities and differences between local and foreign firms in the South African Health Sector

“…The antecedents of CPS are commonly grouped as firm-level, industry-level, issue-based, and institutional factors (Hillman et al, 2004). At firm level, factors that play a role are firm size, firm age, dependency on government, slack assets, diversification level and formalised firm structures (Hillman et al, 2004;Tian & Deng, 2007;Weymouth, 2013).…”

“…At firm level, factors that play a role are firm size, firm age, dependency on government, slack assets, diversification level and formalised firm structures (Hillman et al, 2004;Tian & Deng, 2007;Weymouth, 2013). Firm size can be measured by sales, assets, market share or number of employees and is often a representation for available resources (Hillman et al, 2004).…”

“…At firm level, factors that play a role are firm size, firm age, dependency on government, slack assets, diversification level and formalised firm structures (Hillman et al, 2004;Tian & Deng, 2007;Weymouth, 2013). Firm size can be measured by sales, assets, market share or number of employees and is often a representation for available resources (Hillman et al, 2004). Firms with added resources are more likely to engage policymakers and do so alone, while those with fewer resources often act collectively with others (Hillman & Hitt, 1999;Macher & Mayo, 2012).…”

“…Additionally, resource dependency theory suggests that those firms with higher levels of dependence on government will engage in higher levels of CPA (Hillman & Hitt, 1999). There is limited evidence that firms with high levels of slack will engage more in CPA because they can afford to do so (Hillman et al, 2004). Firm age has not been shown to impact CPA, but it has been used as a proxy for firm visibility, reputation, experience or credibility which all have a positive correlation with CPA (Hillman et al, 2004).…”

“…Firm age has not been shown to impact CPA, but it has been used as a proxy for firm visibility, reputation, experience or credibility which all have a positive correlation with CPA (Hillman et al, 2004). Hillman et al (2004) categorise CPA according to nature (proactive or reactive), approach (transactional or relational), participation level (alone or in groups) and strategy type (information, financial incentive or constituent building).…”