Bimodal lobbying and trade policy outcomes: Evidence from corporate political activity under uncertainty in India

Amrita Saha (), Vikrant Shirodkar () and Thomas C. Lawton ()
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Amrita Saha: Institute of Development Studies
Vikrant Shirodkar: University of Sussex Business School
Thomas C. Lawton: University College Cork

Journal of International Business Policy, 2023, vol. 6, issue 1, No 2, 24-46

Abstract: Abstract We lack insight into how firms reduce uncertainty by engaging with trade policy through corporate political activity (CPA), particularly in emerging economies. In this paper, we argue that CPA, as an instrument of nonmarket strategy, is more effective in achieving trade policy outcomes that reduce corporate uncertainty when firms pursue a bimodal approach, lobbying both collectively and individually. Collective actors such as trade associations gain influence through industry legitimacy and expertise, and can enable individual corporate lobbying to benefit from enhanced political capabilities in terms of information gathering, developing legitimacy, and aligning divergent interests. We also find that the bimodal approach is more effective for exporting firms, and when there is government support for an industry. Our empirical analysis is based on survey data of 146 Indian firms, in the context of a changing socio-political era. We contribute to the literature by highlighting the complementarity between collective and private political lobbying in reducing trade policy uncertainty. Overall, we contribute to research on CPA and nonmarket strategy, particularly in the context of emerging economy trade policy.

Keywords: corporate political activity; lobbying; emerging economies; India; trade policy (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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DOI: 10.1057/s42214-022-00145-w

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