Antecedents Of Foreign Corporate Political Activity In American Politics

Abstract

International firms compete in the United States in both the market and non-market arenas (Doh, & Lucea, 2013). The international management literature has a long history of research focused on market competition but, non-market competition has been largely ignored (Lawton, McGuire & Rajwani, 2013). At the same time, there is a large and increasing amount of money being spent by foreign firms on lobbying and other non-market activities in America. In an effort to aid in our understanding of foreign firms who engage in corporate political activity (CPA) in the United States, I investigated foreign firms that engage in CPA in America. In this multi-level examination I hypothesized country, industry and firm level antecedents using a sample of 33,299 foreign firms, 129 of which engage in CPA in the United States. Findings indicate that firm size, the presence of institutional investors, and industry structure have the strongest influence on foreign firms engaging in CPA in the US. Previous research on corporate political activity has been dominated by the study of domestic firms. This domestic focus occurs despite the fact that foreign entities make up a quarter of the total money spent on lobbying in America (Freeman, 2012). This is one of the first studies of CPA across a broad range of countries and industries to date. This is also the first study, to my knowledge, that attempts to test well established domestic CPA findings in foreign firms.