IDEAS home Printed from https://ideas.repec.org/p/soz/wpaper/0205.html
   My bibliography  Save this paper

Lobbying Activities of Multinational Firms

Author

Listed:
  • Andreas Polk

Abstract

This paper investigates if multinationals in.uence the political process through lobbying more effectively than national firms. First, I introduce a model which contrasts a multinational�s incentives for lobbying with those of a national firm. Then the effect of lobbying on the political decision is analyzed. I conclude that multinationals have smaller incentives to lobby because they have smaller stakes in national markets. But the effectiveness of lobbying by multinationals might be higher if the government cares much about production in the home country. The resulting regulation depends on the relative strength of these effects.

Suggested Citation

  • Andreas Polk, 2002. "Lobbying Activities of Multinational Firms," SOI - Working Papers 0205, Socioeconomic Institute - University of Zurich, revised Jun 2002.
    • Handle: RePEc:soz:wpaper:0205
    as

    Download full text from publisher

    File URL: https://www.zora.uzh.ch/id/eprint/52163/1/wp0205.pdf
    File Function: Revised version, 2002
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 1-31.
    2. Andreas Polk, 2002. "How Special Interests Shape Policy - A Survey," SOI - Working Papers 0206, Socioeconomic Institute - University of Zurich, revised Jul 2002.
    3. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    4. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 229-244, August.
    5. Ellingsen, Tore & Warneryd, Karl, 1999. "Foreign Direct Investment and the Political Economy of Protection," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 357-379, May.
    6. Bruce A. Blonigen & Yuka Ohno, 2019. "Endogenous Protection, Foreign Direct Investment and Protection-building Trade," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 6, pages 205-233, World Scientific Publishing Co. Pte. Ltd..
    7. Eckhard Janeba, 2000. "Tax Competition When Governments Lack Commitment: Excess Capacity as a Countervailing Threat," American Economic Review, American Economic Association, vol. 90(5), pages 1508-1519, December.
    8. Lawrence H. Summers, 1999. "Distinguished Lecture on Economics in Government: Reflections on Managing Global Integration," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 3-18, Spring.
    9. Bhagwati, Jagdish N & Dinopoulos, Elias & Wong, Kar-yiu, 1992. "Quid Pro Quo Foreign Investment," American Economic Review, American Economic Association, vol. 82(2), pages 186-190, May.
    10. Rauscher, Michael, 1994. "Environmental Regulation and the Location of Polluting Industries," CEPR Discussion Papers 1032, C.E.P.R. Discussion Papers.
    11. Bhagwati, Jagdish N. & Brecher, Richard A. & Dinopoulos, Elias & Srinivasan, T. N., 1987. "Quid pro quo foreign investment and welfare : A political-economy-theoretic model," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 127-138, October.
    12. Olarreaga, Marcelo, 1999. "Foreign-owned Capital and Endogenous Tariffs," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 606-624.
    13. Hideo Konishi & Kamal Saggi & Shlomo Weber, 2023. "Endogenous trade policy under foreign direct investment," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 23, pages 523-542, World Scientific Publishing Co. Pte. Ltd..
    14. Armin Schmutzler, 2001. "Environmental Regulations and Managerial Myopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 87-100, January.
    15. Hillman, Arye L & Ursprung, Heinrich W, 1993. "Multinational Firms, Political Competition, and International Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 347-363, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Holtbrügge, Dirk & Berg, Nicola & Puck, Jonas F., 2007. "To bribe or to convince? Political stakeholders and political activities in German multinational corporations," International Business Review, Elsevier, vol. 16(1), pages 47-67, February.
    2. Heidenreich, Stefan & Mohr, Alexander & Puck, Jonas, 2015. "Political strategies, entrepreneurial overconfidence and foreign direct investment in developing countries," Journal of World Business, Elsevier, vol. 50(4), pages 793-803.
    3. Kokko, Ari, 2006. "The Home Country Effects Of Fdi In Developed Economies," EIJS Working Paper Series 225, Stockholm School of Economics, The European Institute of Japanese Studies.
    4. Rodolphe Desbordes & Julien Vauday, 2007. "The Political Influence Of Foreign Firms In Developing Countries," Economics and Politics, Wiley Blackwell, vol. 19(3), pages 421-451, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andréa M. Maechler, 2000. "The Politics of Trade Liberalization in the Presence of FDI Incentives," Working Papers 00.09, Swiss National Bank, Study Center Gerzensee.
    2. Blanchard, Emily J., 2010. "Reevaluating the role of trade agreements: Does investment globalization make the WTO obsolete?," Journal of International Economics, Elsevier, vol. 82(1), pages 63-72, September.
    3. Polk, Andreas & Schmutzler, Armin & Müller, Adrian, 2014. "Lobbying and the power of multinational firms," European Journal of Political Economy, Elsevier, vol. 36(C), pages 209-227.
    4. Louis Jaeck & Sehjeong Kim, 2018. "FDI Deregulation Versus Labor Market Reform: a Political Economy Approach," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(1), pages 73-89, March.
    5. Hideo Konishi & Kamal Saggi & Shlomo Weber, 2023. "Endogenous trade policy under foreign direct investment," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 23, pages 523-542, World Scientific Publishing Co. Pte. Ltd..
    6. Grether, Jean-Marie & de Melo, Jaime & Olarreaga, Marcelo, 2001. "Who determines Mexican trade policy?," Journal of Development Economics, Elsevier, vol. 64(2), pages 343-370, April.
    7. Olarreaga, Marcelo, 1999. "Foreign-owned Capital and Endogenous Tariffs," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 606-624.
    8. Gene Grossman & Elhanan Helpman, 1994. "Foreign Investment with Endogenous Protection," NBER Working Papers 4876, National Bureau of Economic Research, Inc.
    9. Masahiro Endoh, 2012. "Cross-border political donations and Pareto-efficient tariffs," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(4), pages 493-512, July.
    10. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
    11. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
    12. Yasukazu Ichino, 2013. "Antidumping Petition, Foreign Direct Investment, and Strategic Exports," Research in World Economy, Research in World Economy, Sciedu Press, vol. 4(1), pages 22-34, March.
    13. Nicolas Marceau & Michael Smart, 2003. "Corporate Lobbying and Commitment Failure in Capital Taxation," American Economic Review, American Economic Association, vol. 93(1), pages 241-251, March.
    14. K. C. Fung & Chelsea C. Lin & Ray‐Yun Chang, 2009. "The Political Economy of Strategic Trade Policies," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 494-509, August.
    15. Annicchiarico, Barbara & Marvasi, Enrico, 2019. "Protection for sale under monopolistic competition: Beyond the CES," European Journal of Political Economy, Elsevier, vol. 60(C).
    16. Takemori, Shumpei & Tsumagari, Masatoshi, 1997. "A political economy theory of foreign investment: An alternative approach," Japan and the World Economy, Elsevier, vol. 9(4), pages 515-531, December.
    17. Kokko, Ari, 2006. "The Home Country Effects Of Fdi In Developed Economies," EIJS Working Paper Series 225, Stockholm School of Economics, The European Institute of Japanese Studies.
    18. Çaglar Özden & Francisco J. Parodi, 2004. "Customs Unions And Foreign Investment: Theory And Evidence From Mercosur’s Auto Industry," Working Papers Central Bank of Chile 282, Central Bank of Chile.
    19. Wang, Jue-Shyan & Koo, Hui-wen & Chen, Tain-Jy, 2006. "Resource rivalry and endogenous lobby," Japan and the World Economy, Elsevier, vol. 18(4), pages 488-511, December.
    20. Dapeng Cai & Jie Li, 2014. "Protection versus Free Trade: Lobbying Competition between Domestic and Foreign Firms," Southern Economic Journal, John Wiley & Sons, vol. 81(2), pages 489-505, October.

    More about this item

    Keywords

    multinational enterprizes; regulation; policy formation; lobbying; interest groups; foreign direct investment.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:soz:wpaper:0205. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Severin Oswald (email available below). General contact details of provider: https://edirc.repec.org/data/seizhch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.