We study corporate non-market strategies designed to influence the lobbying behavior of other special interest groups. We focus on conditions under which costly lobbying is an informative signal to policymakers about the true state of the world, and in which stringent policy is so costly to the firm that the firm is not viewed as a credible source of information. We study three corporate non-ma...

Corruption and lobbying are to some extent substitutes. Through lobbying a firm may be able to "change the rules" to the firm’s advantage. Alternatively, a firm may bribe a bureaucrat to "bend the rules" and thus avoid the cost of compliance. But there are important differences. While a change in the rules is more permanent, the bureaucrat can hardly commit not to ask for bribes also in the fut...

We study three corporate nonmarket 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...

The paper examines amodel inwhich the number of immigrants allowed into a country is the outcome of a costly political lobbying contest between a firm and a union. The union and the firm bargain over the wage of natives after the number of immigrants that will be permitted is known. I assume that the lobbying contest is an all-pay auction (i.e., the lobbyist with the higher effort wins with cer...

This paper empirically investigates market behavior and firms’ lobbying in a unified structural setup. In a sequential game, where firms lobby for regulation before they compete in the product market, we derive a testable measure of lobbying coordination. Applying the setting to the early U.S. cellular services industry, we find that lobbying expenditures, as measured by campaign contributions,...

Firms systematically lobby the U.S. Congress to in uence policy-making. To what extent do lobbying expenditures a ect the probability that a policy is enacted? What are the private returns from lobbying expenditures? To answer these questions, I construct a novel dataset comprised of federal energy legislation and lobbying activities by the energy sector during the 110th Congress (2007 2008). A...