The Relationship between Corporate Political Strategy of Public Partnership and Corporate Investment

Lin Woon Leong (), Kelvin Lee Yong (), Pek Chuen Khee (), Irfah Najihah Binti Basir Malan () and Ho Ree Chan ()
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Lin Woon Leong: Taylor’s University
Kelvin Lee Yong: Taylor’s University
Pek Chuen Khee: Taylor’s University
Irfah Najihah Binti Basir Malan: Universiti Teknologi MARA
Ho Ree Chan: Taylor’s University

Foresight and STI Governance (Foresight-Russia till No. 3/2015), 2024, vol. 18, issue 2, 31-44

Abstract: Companies are adopting a variety of strategies to reach new levels of development. Along with the course on self-sufficiency and risk management, many players consider a complex combination of strategic actions acceptable for themselves: they invest in political initiatives, expecting in the long term to receive government support in order to turn it into a “booster†for their own investment and innovation activity. This article presents a detailed analysis of the impact of corporate political activity (CPA) on the formation of long-term technological and market advantages for business. This study is based on a sample of US-listed companies. The effects of the considered strategy for improving business performance appear to be ambiguous. To develop and clarify the results of previous studies, it is concluded that CPA brings tangible benefits to companies only up to a certain limit. The most significant benefits from the use of this tool, in addition to small companies, are derived by large players, which for one reason or another have been in a vulnerable position in terms of building capital. On the contrary, self-sufficient and stable business entities that have managed to accumulate a solid investment base should abandon CPA. Instead, they should focus on expanding their market presence and investing in research and development, which will provide more tangible returns than CPA.

Keywords: long-term strategies; technological potential; research and development; innovation; corporate political activity; corporate investment; uncertainty; quantile regression (search for similar items in EconPapers)
JEL-codes: M14 (search for similar items in EconPapers)
Date: 2024
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