This article draws from theories of business-government relations and Austrian economics to develop a model relating firm performance to the firm’s market and nonmarket actions. Nonmarket actions represent one mechanism for the implementation of firm strategies. The model is tested using an original data set covering airlines serving international routes in the North Atlantic region. Results suggest that nonmarket actions have a positive and significant impact on performance, measured in three ways: profits, market share, and capacity utilization.

This study explores the impact of publicly traded founding family firms (FFFs) on their propensity for corporate political activity (CPA) and their choice of political approaches. Based on the behavior and characteristics of publicly traded FFFs, the author expected a positive association between FFFs and corporate political activity and a preference for relational, or long-term, over transactional, or short-term, corporate political activity. It was found that publicly traded FFFs are more likely to engage in CPA only when the firm's founder (...) is in an executive position. Furthermore, publicly traded FFFs show a preference for relational versus transactional corporate political activity. These findings are examined in light of FFF and corporate political strategy literatures. (shrink)

This article explains the rationale for study of the governance challenges of corporate political activity. The topic is important, especially in light of the U.S. Supreme Court’s 2010 Citizens United decision, but understudied to date. The authors review the literature bearing on this topic. The authors separate consideration of the topic into macro-level and micro-level issues. The macro level concerns the societal perspective. At this level, key research questions concern whether corporate political activity be allowed, and how it should be (...) regulated. The micro level covers managerial and shareholder control over corporate political activity. At this level, key research questions include concern whether the firm should practice political activity and how to regulate practice through professional self-regulation, ethical guidelines, and corporate governance systems control. The remainder of this article contains focused summaries of the articles selected for this Special Issue. Each article is introduced and evaluated against the key research questions at the macro or micro levels of analysis. (shrink)

This study focuses on the determinants of political strategies used by U.S. multinationals (MNCs) in Europe. Empirical support is found for Hillman and Hitt’s taxonomy of political decisions—that is, approach, participation level, and strategy. The role of institutional- versus firm-level variable determinants of these choices is explored as are the relative effects of firm versus industry variables within differing political contexts. Results based on a survey sample of 169 U.S. MNC subsidiaries within 14 European countries support the finding that both (...) institutional- and firm-level variables are important determinants of political strategy approach, participation level, and strategy. (shrink)

This study integrates the research on corporate political strategy and corporate governance. Using the agency theory perspective, this study examines how corporate governance mechanisms such as institutional ownership, insider ownership, and long-term executive compensation affect a firm’s political strategy approach. This study proposes that an agency problem may occur between owners and managers in regard to firms’ approach to corporate political strategy. Since a relational approach to corporate political strategy, such as establishing a government relations office in Washington, DC, requires (...) significant resource commitments without guaranteeing a favorable policy change, shareholders might be reluctant to approve such an approach. In a sample of 3,417 U.S. manufacturing firms, over 5 years of data, the results show that institutional ownership and insider ownership are negatively associated with firms’ propensity to engage in a relational approach to political strategy. (shrink)