Lobbying and the power of multinational firms

Andreas Polk, Armin Schmutzler and Adrian Müller

European Journal of Political Economy, 2014, vol. 36, issue C, 209-227

Abstract: Can multinational firms exert more power than national firms by influencing politics through lobbying? To answer this question, we analyze the extent of national environmental regulation when policy is determined in a lobbying game between a government and a firm. We compare the resulting equilibrium regulation levels, outputs and welfare in a game with a multinational firm with those in an otherwise identical game with a national firm. For low transportation costs, output and pollution of a national firm are always as least as high as for a multinational; this changes for high transportation costs and intermediate damage parameters. When there is no lobbying, welfare levels are always higher with multinationals than with national firms. However, the existence of lobbying may reverse this ordering.

Keywords: Multinational enterprises; Regulation; Pollution; Lobbying; Interest groups; Foreign direct investment (search for similar items in EconPapers)
JEL-codes: D72 F23 L51 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Lobbying and the Power of Multinational Firms (2013)
Working Paper: Lobbying and the Power of Multinational Firms (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:36:y:2014:i:c:p:209-227

DOI: 10.1016/j.ejpoleco.2014.07.010

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