Beyond Nonmarket Strategy: Market Actions As Corporate Political Activity

2017 ◽  
Vol 42 (1) ◽  
pp. 32-52 ◽  
Author(s):  
Russell J. Funk ◽  
Daniel Hirschman
Keyword(s):  
Political Activity ◽  
Corporate Political Activity ◽  
Nonmarket Strategy

Corporate Political Activity and Regulatory Capture: How Some Companies Blunt the Knife of Socially Oriented Investor Activism

2016 ◽  
Vol 44 (5) ◽  
pp. 2064-2093 ◽  
Author(s):  
Michael Hadani ◽  
Jonathan P. Doh ◽  
Marguerite A. Schneider
Keyword(s):  
Shareholder Activism ◽  
Securities And Exchange Commission ◽  
Political Activity ◽  
Social Movement Organizations ◽  
Regulatory Capture ◽  
Corporate Political Activity ◽  
Nonmarket Strategy ◽  
Labor Policies ◽  
The Status ◽  
The Impact

Socially oriented shareholder activism is an increasingly important mechanism through which social movement organizations seek to influence the private sector by exerting pressure on corporate activities in areas such as human rights, environmental protection, and labor policies. This activism challenges the status quo of targeted firms and potentially their institutional field, disrupting “business as usual” and often drawing negative attention to the firms. We theorize that some firms might use corporate political activity (CPA) as an indirect, nonmarket strategy aimed at regulatory capture to reduce the impact of such disruptions. We focus on one popular avenue of shareholder activism—the proxy proposal mechanism—and the role the Securities and Exchange Commission (SEC) plays in allowing omission of socially oriented shareholder proposals from the proxy ballot. Using two distinct data sources, we find evidence that for S&P 500 firms, the SEC allows for the omission of the proposals from proxy ballots more frequently for those firms more active in CPA. These findings inform the growing scholarship on socially oriented activism as well as suggest the indirect influence of CPA on government agency decision making.

scholarly journals Navigating cross-border institutional complexity: A review and assessment of multinational nonmarket strategy research

2021 ◽  
Author(s):  
Pei Sun ◽  
Jonathan P. Doh ◽  
Tazeeb Rajwani ◽  
Donald Siegel
Keyword(s):  
Multinational Enterprises ◽  
Political Activity ◽  
Future Research ◽  
Strategy Research ◽  
Corporate Political Activity ◽  
Missed Opportunities ◽  
Nonmarket Strategy ◽  
Global Issues ◽  
Global Institutions ◽  
Corporate Social

AbstractMultinational enterprises are deeply engaged in nonmarket strategy (NMS), including both corporate political activity (CPA) and strategic corporate social responsibility (SCSR). In this review, we document the multinational NMS research according to contributions’ theme, method, context, theory, and level of analysis. We then develop an institutional multiplicity framework to organize our analysis of this large and fragmented body of literature. In so doing, we identify the most impactful contributions within three major themes – multinational CPA, multinational SCSR, and the integration of CPA and SCSR – and their respective subthemes, and call attention to limitations in the extant research. We also highlight promising avenues for future research, including expanding the scope of NMS to incorporate microfoundations research, integrating macrolevel scholarship on global institutions, placing greater attention on the interaction between CPA and SCSR, and incorporating multi-actor global issues and movements. Our review underscores the growing importance and missed opportunities of NMS research in the international business field.

scholarly journals Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions

2019 ◽  
Vol 161 (4) ◽  
pp. 855-876
Author(s):  
Tahiru Azaaviele Liedong ◽  
Daniel Aghanya ◽  
Tazeeb Rajwani
Keyword(s):  
Resource Dependency ◽  
Emerging Countries ◽  
Policy Implications ◽  
Political Activity ◽  
Dark Side ◽  
Political Strategies ◽  
Corporate Political Activity ◽  
Corporate Political Strategies ◽  
Shed Light ◽  
Universal Application

Abstract There is a lack of research about the political strategies used by firms in emerging countries, mainly because the literature often assumes that Western-oriented corporate political activity (CPA) has universal application. Drawing on resource-dependency logics, we explore why and how firms orchestrate CPA in the institutionally challenging context of Nigeria. Our findings show that firms deploy four context-fitting but ethically suspect political strategies: affective, financial, pseudo-attribution and kinship strategies. We leverage this understanding to contribute to CPA in emerging countries by arguing that corporate political strategies are shaped by the reciprocity and duality of dependency relationships between firms and politicians, and also by advancing that these strategies reflect institutional weaknesses and unique industry-level opportunities. Importantly, we shed light on the muttered dark side of CPA. We develop a CPA framework and discuss the research, practical and policy implications of our findings.

scholarly journals With other people’s money: Campaign financing as an agency problem

2019 ◽  
Vol 45 (1) ◽  
pp. 40-49 ◽  
Author(s):  
Marina Amado Bahia Gama ◽  
Gisele Walczak Galilea ◽  
Rodrigo Bandeira-de-Mello ◽  
Rosilene Marcon
Keyword(s):  
Agency Theory ◽  
Political Campaigns ◽  
Political Activity ◽  
Corporate Political Activity ◽  
Listed Firms ◽  
Electoral Campaigns ◽  
Earning Quality ◽  
Campaign Financing ◽  
Harmful Effects

Agency theory explanations for corporate political activity assume that managers distort resource allocation to invest in political connections to pursue personal benefits. While distorted resource allocations yield poor earning quality, we expect that companies with efficient governance may curb this opportunistic behavior. We used matching procedures to identify the effects of financing political campaigns on the earning quality of the firm. We assembled an original panel of listed firms in Brazil from 1998 to 2013. We found that firms that donated to electoral campaigns had a lower earning quality than nondonor firms. Firms with superior corporate governance instruments were able to reduce the harmful effects on earning quality. These results support the tenets of agency theory in explaining why firms engage in politics.

Sign in / Sign up

Export Citation Format

Share Document