Gaining Access by Doing Good: The Effect of Sociopolitical Reputation on Firm Participation in Public Policymaking

Abstract

This paper examines the role of firms’ sociopolitical reputations, as proxied by their perceived engagement in socially responsible practices, in public policymakers’ decisions to grant access in the policymaking process. I argue that policymakers’ dependencies, motivations, and decision-making processes lead them to evaluate firms by using sociopolitical reputation as a differentiating heuristic. I hypothesize that firms that construct stronger sociopolitical reputations will be granted greater access and that firms’ existing political activity and policymakers’ partisanship will moderate this relationship. I test these hypotheses using an 11-year panel on congressional testimony, reputation, and political and financial characteristics for the S&P 500 and find support for all three. These findings support the existence of a sociopolitical dimension to firms’ reputations that affects how public policymakers evaluate firms, demonstrating that corporate social responsibility pays political benefits.

Keywords: reputation, resource dependency, non-market strategy, corporate social responsibility