Interest Group Lobbying and Corporate Strategy

37 Pages Posted: 26 Apr 2003

See all articles by Thomas P. Lyon

Thomas P. Lyon

University of Michigan, Stephen M. Ross School of Business

John W. Maxwell

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Indiana University, Department of Economics; Richard Ivey School of Business

Date Written: December 2002

Abstract

We study three corporate non-market strategies designed to influence the lobbying behavior of other special interest groups: 1) "astroturf," in which the firm covertly subsidizes a group with similar views to lobby when it normally would not, 2) the "bear hug," in which the firm overtly pays a group to alter its lobbying activities, and 3) self-regulation, in which the firm voluntarily limits the potential social harm from its activities. All three strategies reduce the informativeness of lobbying, and all reduce the payoff of the public decision maker. We show that the decision maker would benefit by requiring the public disclosure of funds spent on astroturf lobbying, but the availability of alternative influence strategies limits the impact of such a policy.

Keywords: Special Interest Group, Lobbying, Corporate Strategy

JEL Classification: L51, Q28

Suggested Citation

Lyon, Thomas P. and Maxwell, John W., Interest Group Lobbying and Corporate Strategy (December 2002). Available at SSRN: https://ssrn.com/abstract=375624 or http://dx.doi.org/10.2139/ssrn.375624

Thomas P. Lyon (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-615-1639 (Phone)

John W. Maxwell

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Department of Business Economics and Public Policy
Kelley School of Business, Indiana University
Bloomington, IN 47405
United States
812-855 9219 (Phone)
812-855 3354 (Fax)

HOME PAGE: http://johnwmaxwell.com

Indiana University, Department of Economics ( email )

Wiley Hall
Bloomington, IN
United States

Richard Ivey School of Business ( email )

The University of Western Ontario
1151 Richmond Street North
London, Ontario N6A3K7
Canada
5198502439 (Phone)
5198502306 (Fax)

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