The Structure and Conduct of Corporate Lobbying: How Firms Lobby the Federal Communications Commission

Abstract

This paper examines the amount and organization of lobbying (internal organization vs.trade association) by firms in administrative agencies. It explores the power and limitations of the collective action theories and transaction cost theories in explaining lobbying. It introduces a dataset of over 900 lobbying contacts cover 101 issues at the Federal Communications Commission (FCC) in early 1998. We find that the structure and conduct of large firm lobbying at the FCC is consistent with the predictions of theories of transaction costs and the main results of theories of collective action. However, large firms do not change their behavior drastically as structures arise to remedy the free rider problem. Small firms show no sensitivity to collective action issues or transaction cost issues in the organization or amount of their lobbying, but they do lobby less when having to reveal proprietary information. In sum, large firms behave largely consistent with theoretical predictions, while small firms do not.

Lobbying in Europe: New Firm-Level Evidence

“…Therefore, we assume that firms are more likely to undertake lobbying the larger they are. This would be also in line with evidence gathered for the US (Grier et al 1994;Kerr et al, 2014;or de Figueiredo and Tiller, 2001). We will use different proxies for firm size.…”

Corporate Environmental Performance and Lobbying

“…In a different context, de Figueiredo and Tiller (2001) show that transactional hazards affect the quantity and organization of lobbying. However, some anecdotal evidence indicates that firms might not want to expose their lobbying position and might use outside lobbyists to promote their agenda without having their name associated with the issue.…”

“…Scholars have argued that the current theory on lobbying tends to be focused on the amount of lobbying that occurs, and has largely omitted the options firms have to organize their lobbying (de Figueiredo & Tiller, 2001). Our research shows that studying empirically how firms organize their lobbying, whether internally or externally, is a particularly interesting area to pursue with this new data.…”

“…Existing empirical studies of corporate political activity have instead relied primarily on election campaign contributions through PACs (Brasher & Lowery, 2006;de Figueiredo & Tiller 2001;Hansen & Mitchell, 2000;Kim, 2008), which are considered to be a relatively poor indicator political activity (Hansen & Mitchell, 2000;Hansen, Mitchell, & Drope, 2005;Munger, 1988). It is also difficult to link a firm's campaign contribution to a specific political issue, such as environmental policy, as politicians typically run on a diverse platform of issues.…”

“…Nonetheless, with little exception, the empirical literature has paid scant attention to the relationship between environmental performance and political activity (Cho et al, 2006;Clark & Crawford, 2012;Kamieniecki, 2006). Until recently, empirical studies of corporate political activity have focused mostly on election campaign contributions via political action committees (PACs) to proxy political strategies and activity (Brasher & Lowery, 2006;de Figueiredo & Tiller, 2001;Hansen & Mitchell, 2000;Kim, 2008).…”