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The internal limits to firms' nonmarket activities

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  • Bonardi, Jean-Philippe

Abstract

It is well documented that firms develop nonmarket strategies in an effort to shape public policy changes to their advantage. But are there no limits to this? This paper argues that there is, in fact, an important limitation, internal to the firm, that stems from the necessity for firms to integrate market and nonmarket activities. Because the two types of activities are not always complements but sometimes substitutes, firms end up forgoing part of their nonmarket activities to avoid restricting the development of their market strategies. This argument is tested in the context of the European telecommunications industry. Results suggest that there is reasonable ground for optimism regarding the potentially negative influence that firms’ nonmarket activities might play in a democracy.

Suggested Citation

  • Bonardi, Jean-Philippe, 2008. "The internal limits to firms' nonmarket activities," MPRA Paper 14500, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14500
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    File URL: https://mpra.ub.uni-muenchen.de/14500/1/MPRA_paper_14500.pdf
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    References listed on IDEAS

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    Cited by:

    1. Carole RENTSCH & Matthias FINGER, 2014. "Yes, no, maybe: the ambiguous relationships between State-owned enterprises and States," Departmental Working Papers 2014-05, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Pei Sun & Kamel Mellahi & Mike Wright & Haoping Xu, 2015. "Political Tie Heterogeneity and the Impact of Adverse Shocks on Firm Value," Journal of Management Studies, Wiley Blackwell, vol. 52(8), pages 1036-1063, December.
    3. Bonardi Jean-Philippe & Urbiztondo Santiago, 2013. "Asset freezing, corporate political resources and the Tullock paradox," Business and Politics, De Gruyter, vol. 15(3), pages 275-293, October.
    4. Thomas Wrona & Corinna Sinzig, 2018. "Nonmarket strategy research: systematic literature review and future directions," Journal of Business Economics, Springer, vol. 88(2), pages 253-317, February.
    5. David Eduardo Cavazos & Matthew A. Rutherford, 2017. "Applying firm attention theory to assess the antecedents of firm participation in regulatory processes," Review of Managerial Science, Springer, vol. 11(2), pages 395-410, March.
    6. Ozer, Mine, 2010. "Top management teams and corporate political activity: Do top management teams have influence on corporate political activity?," Journal of Business Research, Elsevier, vol. 63(11), pages 1196-1201, November.
    7. Carole RENTSCH & Matthias FINGER, 2015. "Yes, No, Maybe: The Ambiguous Relationships Between State-Owned Enterprises And The State," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(4), pages 617-640, December.

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    More about this item

    Keywords

    Nonmarket activities; lobbying; deregulation;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • H00 - Public Economics - - General - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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