Social ties and the political participation of firms

Cesi Cruz () and Benjamin A. T. Graham ()
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Cesi Cruz: University of British Columbia, Los Angeles
Benjamin A. T. Graham: University of Southern California

The Review of International Organizations, 2022, vol. 17, issue 1, No 5, 117-142

Abstract: Abstract It is widely accepted that better-connected firms exercise more political influence. However, because both social ties and political influence are difficult to observe, it remains little understood how different types of ties affect different types of political action. We develop new theory that contrasts the effects of ties to other firms in the same industry (peer ties) with ties to elected officials and bureaucrats (government ties). We argue that peer ties are useful for facilitating collective action, which is most often used to seek influence over broad policy issues that affect many firms. In contrast, while government ties are more versatile, these should primarily also allow firms to pursue narrow, particularistic issues that benefit only one or a small number of firms. Using a new survey of foreign-owned firms operating in the Philippines, we demonstrate that peer ties play an important role in firms’ efforts to influence policy at the national level, where issues are more likely to affect large numbers of firms. Government ties are also valuable, though primarily at the local level, where issues are more likely to affect a smaller number of firms.

Keywords: Networks; Social ties; Social capital; Firms; Foreign investment; Foreign direct investment; FDI; Lobbying; Interest groups; Corporate political participation; Collective action (search for similar items in EconPapers)
JEL-codes: F23 L20 L21 L25 M1 M16 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11558-021-09420-6

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