Polarizers or Landscape Groomers? An Empirical Analysis of Party Donations by the 100 Largest German Companies in 1984-2005

Abstract

What can donation strategies tell us about corporate political preferences, as seen from the perspective of power resource and varieties of capitalism theories? This article tests six hypotheses within an Olsonian framework for corporate donations to political parties with new data from the 100 largest German firms between 1984 and 2005. The findings reveal that (1) only a minority of firms donate, and donation amounts are surprisingly small given the financial assets of these companies, which suggests the presence of a collective action dilemma with small selective and arguably larger collective benefits; (2) management ties between firms are an important way of making firms overcome the collective action dilemma; (3) firms distribute their donations – if any - mainly on the right side of the political spectrum, particularly if the firms are personally interwoven with other large companies or if they are family owned; (4) however, some firms, particularly those belonging to the automobile sector, donate across the political spectrum.

Keywords: companies, varieties of capitalism, political parties, donations, Germany, pwer resource theory