Firms with well-formulated competitive market strategies could still fail due to their lack of effective nonmarket strategy. Climate change poses significant threats to firms and presents firms’ need to develop nonmarket strategy integrated with market strategy. Relying on the unique dataset of US S&P 500 firms’ responses to climate change, this study seeks to ask why some firms attempt to engage in climate policy making, while others do not do so. The results found that firms with organizational resources and capabilities underlying their carbon market strategy are more likely to support mandatory climate policy. It sheds light on the significance of integrated market and nonmarket strategies, particularly when business opportunities are controlled more by governments than by markets.

The globalization of production simultaneously opens up new opportunities for firms and threatens them with intensified foreign competition. Studies of the resulting producer demands for commercial policy have not yet incorporated two recent trends: the increasing significance of the trade in services and the proliferation of international corporate alliances. With two US industries (airlines and telecommunications) as illustrative case studies, it can be seen that, to a surprising extent, even competitive global industries will seek to block foreign competitors from entering local markets via alliances. The level of political conflict in response to these alliances is related to the issue of market access at home and abroad. Market barriers abroad provide global producers with the motive for seeking contingent restrictions. Restrictions at home give domestic firms the opportunity to oppose alliances without worrying that competitors could enter the market through foreign direct investment. The model suggests some important differences in the political reactions to globalization between service and manufacturing firms.

This article examines the evolution of U.S. chemical firms' corporate strategies in Asia over the past decade. Prior to the Asian financial crisis, these firms treated the Asian market as an expansion outlet due to a persistent lack of growth in Western markets. Since the crisis, U.S. firms have reformulated their market and organizational strategies to better withstand disruptions of business or product life cycles, specifically through refocusing core competence and establishing regional production networks. Meanwhile, their nonmarket strategies have lagged behind market strategies in specificity and sensitivity to the Asian context. This article explores the early effort in safety and environmental self-governance of the chemical firms in Asia, and argues that the history of domestic competition and government-business relations in the home market has to a large degree determined the transnational strategies of U.S. firms. Finally, U.S. chemical firms strategies are increasingly dependent on the behavior of their Asian competitors - in particular whether Asian producers enter into alliances with U.S. firms or resist liberalization and regional market interpenetration.

Contemporary discussions in the comparative political economy of innovation revolve specifically around the question of globalization's impact on the observable diversity of innovation patterns, institutionally grounded comparative advantages of firms and countries as well as their evolution over time. The paper develops the concept of “contingent institutional adaptation” to trace institutional evolution at the firm level. It advances the idea that contingent adaptation can cause institutional hybridization, an evolutionary path defined by change and continuity, thereby offering a more nuanced concept of institutional evolution over time. In a historic single-case study the paper investigates the German Siemens AG and its efforts to remain on the cutting-edge of major information and communication technologies in two time periods (1847–1914; 1989–2013), both marked by institutional adaptations resulting in hybridization. Ultimately, institutional hybridization led to Siemens’ retreat from all information and communication technology sectors.

Preferential trade agreements (PTAs) promise exclusive access for their members at the expense of excluded parties. But what does this exclusivity mean for firms in nonmember states if production networks are internationally organized? This paper analyzes the effect of PTA exclusion on firms embedded in the global supply chains, focusing on the case of China's exclusion from the Trans-Pacific Partnership (TPP). Drawing on a survey of Chinese firm managers during the TPP negotiations, we find that productive and downstream firms anticipated the exclusion and made adjustments accordingly, which led to a general sense of optimism toward the agreement. When presented with the prospect of an expanded TPP, however, firms are divided depending on how their own positions in the global supply chain complement or compete with the new member. These findings, validated with interviews in the field, suggest that the effects of PTA exclusion depend on the ability and need for firms to adjust. As a result, exclusion does not equate to an unalloyed loss for excluded firms.

What is the nature and extent of corporate leader involvement in American national politics? The results of a mail survey of nearly 100 such individuals show that leaders are quite active, devoting an average of nearly 1 hour per day to national political activity. We also show that corporate leaders engage in a wide range of advocacy activities. Monetary activities loom particularly large in the political lives of American corporate leaders, as large numbers are approached by members of Congress for contributions, and many who are approached answer the call. In addition, we find that corporate leaders, unlike advocacy professionals, do a great deal of their advocacy work in private; for the most part they eschew public activities such as testifying before congressional committees. Speaking to the question of which leaders are most politically active, our data evince a strong relationship between firm political activity and firm leader political activity. In sum, politically active firms have politically active leaders. We thus contribute to the ongoing academic discussion of corporate political activity by showing that the CEO's office is an additional locus of political power within business firms, and that CEO political activity is instrumental rather than consumptive in nature.

Does international investor sentiment improve when a crises-ridden country participates in an International Monetary Fund (IMF) program? I argue that merely participating in an IMF program may not revive the sentiments of investors. Rather, investor sentiment would improve when governments enhance the credibility of their commitment to reforms by accepting severe conditions imposed by the IMF, which incur ex ante and ex post political costs. Using panel data on 166 countries during the 1992–2013 period (twenty-two years), I find that countries participating in IMF programs, with conditions attached, specifically prior actions and performance criteria conditions, after controlling for endogeneity concerns using exogeneous instruments, are associated with an increase in long-term investor sentiment. These results are robust to using alternative data, variables and estimation methods. My findings are in stark contrast to those who argue that IMF conditional programs are akin to swallowing a bitter pill. In fact, my results demonstrate that the so-called bitter pill may act as a palliative.

What explains business views regarding policy preferences in the Eurozone crisis? Although recent literature examines the impact of the crisis on citizen views, few studies examine business preferences towards adjustment policies. We present unique data from a new representative survey of 500 high-level firm representatives from Spain to test theories about such preferences, in particular views about the euro, fiscal austerity, and wage devaluation, as well as plausible mechanisms for such preferences. We test three broad families of theories to explain such preferences, focusing on the role of structural firm characteristics, economic hardship, and political leanings of firm managers. We find that first, there is a strong conservative position regarding all of these policies. Second, we find that contra conventional approaches to explaining preferences, for the domestic policies (but not for euro views), the political leanings of firms matter much more than baseline structural characteristics. Third, we find that surprisingly economic hardship does not cause firms to demand more left-wing policies, as it might for voters; in fact, firms that have suffered are likely to be more skeptical of such measures. These findings indicate the need to better measure political orientations of firm respondents and suggest that this is a larger division among firms than previously recognized.

This paper discusses how MNCs reacted to NAFTA and MERCOSUR in terms of their investment and operations patterns in three sectors - automotive, electronics, and apparel - and assesses the likely impact of the upcoming Free Trade Agreement of the Americas (FTAA). It shows that NAFTA functioned – at least in its first years - as an investment relocation engine, while MNCs' reaction to MERCOSUR was significant only in the automotive sector. The emergence of China and other Asian economies, with their low cost and vast markets, and the progressive enlargement in the scope of MNCs operations, seem to diminish the economic relevance of NAFTA and MERCOSUR. FTAA may provide a new impetus to the integration of the automotive industry in the Americas, and a stronger rationale for a slowdown of plant relocation to Asia in light industries such as electronics and garments. But it is unlikely that it will reverse current trends which point to Asia – with China at the epicenter – as the global magnet for manufacturing and exports.

What explains the pattern of selective business interest in preferential trade agreements (PTAs) with active campaigning for and utilization of tariff preferences for some trade agreements, but not others? Under what conditions can business advocates of PTA policy mount an effective lobbying campaign to influence policy outcomes (i.e., shaping decisions on who to negotiate with and what to negotiate about)? These are important questions given that analyses of Asian PTAs frequently assign a negligible role to business interests either out of apathy or lobbying weakness. To understand the pattern of selective business lobbying for PTAs, I develop a theoretical model with three main independent variables: venue selection, preference intensity, and advocacy effectiveness, and apply it to the case of Japan to test its usefulness. My model shows that the conditions for effective business PTA campaigning are exacting: loss avoidance, high technical expertise, and influence-seeking strategies that maximize access opportunities given institutional constraints. And yet when these factors align, business interests do influence PTA outcomes. My research shows that the current trend to characterize the agency of PTA proliferation as either state-led or business-driven needs to be re-examined as it is more useful to think about state-society constellations in favor or against PTAs.

This paper strives to shed light on the interaction between business groups and the main governing parties after the onset of the economic crisis through a “thick narrative” approach. By focusing on the Portuguese case, the study aims to examine the preferences of the employer confederations during the distinct phases of the economic crisis and to analyze the political alignments established with different party governments. This contribution confirms the fragmentation of business interests on the one hand and tensions between the right-wing government and the main employer confederations on the other. While a pragmatic approach to party politics seems to be the predominant trend, historical and institutional legacies are still important factors when considering the actions and inner tensions of these organizations.

In the period from the 1990s emerging market financial crises until the North Atlantic financial crisis of 2008, the development of domestic bond markets in developing economies was a prominent agenda item in international financial reform circles. The crises of the 1990s drew attention to the vulnerabilities generated by frequently occurring double mismatches of currency denominations and maturities in the borrowing of emerging economies. This led to a series of reform efforts targeted at both increasing liquidity and the range of borrowers in domestic bond markets. In the aggregate, these efforts were successful: For emerging market economies as a whole, domestic debt now exceeds international debt. Moreover, domestic corporate bond markets have emerged in many countries, often for the first time. However, the nature of market development has been far from uniform, and often has not been in line with government aims. In this paper, we examine the interplay of government and business actors in market development. Drawing on 155 interviews with policy and market actors as well as secondary data, we show that the main explanation of variation in market development lies in the pre-existing structure of financial markets, conceptualized as a heterogeneous set of interest/influence constellations.

Research shows that trade openness and high social spending go hand in hand, at least in wealthy democracies. It is not clear, however, exactly why this is so. Many scholars and policymakers argue that generous social spending facilitates trade liberalization, but there is no direct empirical support for this claim. This paper is the first to show directly that social spending promotes freer trade. Specifically, I show that U.S. state-level unemployment insurance makes Congress members significantly more likely to vote for freer trade. Since state unemployment insurance is exogenous to individual congressional votes, my analysis shows clearly that the former affects the latter. My results imply that social spending insures not only citizens but also open trade policies against hard economic times. They also highlight the importance of subnational policy choices to national policy outcomes.

The conventional view of private campaign contributions is that they distort policy to the detriment of society. Formal models consistent with such views, however, are based on restrictive assumptions about the nature of campaigns, interest groups and policy dimensionality. This paper relaxes those assumptions and allows for informative campaigns, multiple interest groups and multiple issue dimensions. It uses analytical and computational methods to demonstrate that private campaign contributions from societally unrepresentative contributors can, under reasonable conditions, improve social welfare. Multidimensionality is important because politicians need to be responsive on salient issues to prevent opponents from raising money based on less salient issues and using the money to publicize positions on salient issues.

To lobby legislators, it is important for interest groups to signal their ability to help legislators win elections and provide them with policy-relevant information. We explore for-profit companies’ use of environmental, social, and governance (ESG) reports as a signaling device to promote their reputation to legislators and convey their ability to provide electoral and policymaking support, which is valuable for lobbying. To this end, we create a panel dataset by combining ESG reports issued by US companies and the same companies’ lobbying and campaign contribution records from 1999 to 2017. We expect companies to issue more ESG reports, as well as reports containing more quantitative content, when they lobby. The data conform to our expectations. We also reason that lobbying may be more strongly related to ESG reporting when it is coupled with campaign contributions made by affiliated corporate political action committees, but the data do not support this expectation.

Researchers have extensively studied how large firms and SMEs use business and political ties to obtain tangible and intangible resources in transition economies. However, how SMEs establish these ties in the context of power-imbalanced dependence by using unethical and illegal “strategic practice” such as bribery remains underexplored. Furthermore, how SMEs deploy strategies to mitigate such risky actions in the process of resource acquisition is also given limited attention in the literature. Lack of exploration of these issues leaves significant gaps in our understanding of how SMEs are able to initiate and operate their ties for survival and growth despite enormous institutional constraints. We analyze the negative and positive effects of power dependence on business resource acquisition via regression analysis using survey data drawn from 232 Chinese SMEs. The findings indicate that power-imbalanced dependence among SMEs is associated with their use of bribery to establish political ties with officials for access to resources. The moderating effect of power-mutual dependence on this relationship is also examined. Theoretical significance and managerial implications of these findings for SMEs in transition economies are discussed.

This article examines the “technology, information, and news corporations” (TINCs), a group of under-studied non-state actors to enhance understanding of the interplay between forms of private authority in times of crisis. Three interrelated arguments regarding the shifting private authority of leading UK- and US-based TINCs are presented. First, contributions to the period of economic instability that began in 2007 have destabilized the long-standing authority of Anglo-American firms including Bloomberg, Dow Jones, and Thomson Reuters. Second, through their involvement in two overtly normative niches of global finance, environmental and Islamic finance, these private actors have responded to contestations of their authority with an enhanced stress on moral authority since 2007. Third, a mere tinkering around with pre-crisis technical knowledge and a persistent reliance on liberal market values is likely to perpetuate rather than resolve the unstable authority of the leading TINCs. Based on an original analysis of primary documents and interviews undertaken with industry participants, this article contributes to existing literature analyzing the changing nature of private authority by revealing limits to shifts and combinations between its moral and technical forms.

Our selection and endogeneity corrected findings suggest that firms' political connections negatively influence their market value. We find that firms with a larger size, more operationally efficient in utilizing their assets, and those operating in more concentrated industries benefit more from the political connections than the otherwise corresponding firms. We also report that political connections do not influence firms' leverage choices. However, we find that politically connected firms with higher leverage have significantly lower market value. Further, we note that political connections help the firms operating in unregulated but more concentrated industries, probably to obtain ‘private benefits’, leading to their higher market value. Overall, our results indicate that the effect of political connections is not homogeneous across the sample firms. They also raise questions on the motivation of sample firms' political connections, suggesting that these firms probably obtain political connections for reasons other than enhancing their market value.

Former legislators who lobby exacerbate the effects of financial resources on the relative political influence that various organized interests achieve. These lobbyists receive more income and achieve favorable policy outcomes more often than other lobbyists. The value of these revolving-door lobbyists, however, is contingent on the continued presence of former colleagues in legislatures. Former legislators achieve influence because of their insider connections, and membership turnover among incumbents decreases the value of this asset for interest groups. I examine the incomes and clienteles of former legislators who lobbied in the American states over seven decades. Turnover is a consistent, negative predictor of revolver value. This effect is enhanced by the presence of legislative staff support. This study is the first to examine the value of revolving-door lobbyists in the state legislatures. My findings imply that reforms that induce turnover help to level playing fields of political advocacy among interests with different levels of financial resources.

Which factors make some American multinational corporations (MNCs) take political action in response to the US–China Trade War and cause others to stay on the sidelines? We identify China-based subsidiaries of US firms to identify firms’ political actions in response to the trade war. We combine data on firms’ tariff exposure, economic actions in China, and political actions in the United States during the trade war. Together these data highlight the divergent strategies with which firms engage. Even though more than 63 percent of MNCs in our sample were adversely impacted by tariffs, only 22 percent voice opposition and 7 percent exit in response to the trade war. Our analysis reveals that US MNCs in China differ in their business models, ownership structure, experience in China, and size of capital investments. These firm-level factors determine the degree to which US MNCs are embedded in China. This in turn shapes how firms perceive political risk and choose from the menu of options to deal with the trade war. Size and age increase voice while joint-venture status decreases it.