Determinants and Impact of Private Politics: An Empirical Analysis

Sonam Gupta and Robert Innes ()

No 6238, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper studies the links between private politics, environmental performance of firms and regulatory activity by the government. Following the terminology coined by Baron (2001), "private politics" refers to the individual or collective actions initiated by public interest and activist groups to further their objectives without relying on the law or regulation. In this paper, we focus on the determinants and effects of two such private political actions, boycotts and proxy contests. We have unique data on boycotts for the time period 1988-95 and on proxy votes for the time period 1988-2000. We find that the size of a firm is an important predictor of the fact if a firm will be chosen as a target of an activist campaign. We find MIXED support for Baron's (2006) theory that activist campaigns will focus on "soft targets" (progressive firms). Our preliminary findings show that private politics does spur the firms to adopt voluntary environmental systems. Specifically, we find that the boycotts increase the probability of adoption of an environmental management system by 27-33 percent.

Keywords: Political; Economy (search for similar items in EconPapers)
Pages: 48
Date: 2008
New Economics Papers: this item is included in nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6238

DOI: 10.22004/ag.econ.6238

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