Description
Foreign entities have contributed massively to lobbying governments in Washington and Brussels; yet such pressing issue has received limited discussion. Scholars have also not paid close attention to the motivation of and the subsequent policy impacts from non-state actors, such as multinational corporations (MNCs). Hence, why do MNCs actively engage in the costly foreign lobbying? How do they articulate their interests, and to what degree is that effective? I focus on the underexamined “lobbying meetings,” and argue that they serve as an efficient and effective political activity for foreign MNCs to realize private and public goals. These missions are three-fold: material returns, corporate risk mitigation, and geoeconomic exchange between home and host countries. First, rational MNCs trade the costly lobbying meetings for preferential treatments, such as tax benefits. Second, information flows bidirectionally during lobbying meetings, which MNCs leverage to mitigate regulatory risk. Finally, private lobbying contributes to the enhancement of geoeconomic relationships between MNCs’ home and host states. As such, firms can serve as state instruments. I use mixed methods to test these arguments, combining staggered Difference-in-Difference estimations with interviews with MNCs, lobbyists, and policy makers. I draw on data from the Foreign Agents Registration Act, the Transparency Register, corporate financial statements, earning call transcripts, official visits, and trade missions. Overall, this study sheds some light on how to buttress democracy from external influence. By joining the emerging scholarship of non-state actors’ global influence, this paper also highlights that foreign firms can be influential in affecting policy outcomes.
