Are firms' lobbying strategies universal?

Lobbying public decision-makers is an increasingly widespread managerial practice, but has so far attracted little research attention in Europe. This article studies how it is put into practice as a strategy by French and UK firms. An empirical study examines 679 lobbying campaigns (also known as “political action”), that are grouped into categories and described using statistical data analysis techniques. The results highlight a pattern in the corporate lobbying phenomenon: five types of lobbying strategy (that can be described and illustrated) exist for French firms, and four for UK firms. The central theme of discussion is to what extent firms'political strategies are universal or country specific. Tentative explanations can be put forward: implementation of lobbying strategies appears to depend on the type of issues addressed (which could be universal), but also on the country's political environment (which could be country specific). The study shows the interdependent influence of human resources, economic structures and the political environment (laws and the role of the state) on firms' lobbying strategies.lobbying, corporate political strategy, societal effects, data analysis, France and the UK

Financial development and survival of African agri-food exports

This paper investigates the link between export survival of agri-food products and financial development. It tests the hypothesis that financial development differentially affects the survival of exports across products based on their need of external finance. The authors test whether exports of products that are relatively more reliant on external capital survive longer when initiated in more financially developed countries. The results suggest that agri-food products that require more external finance indeed sustain longer in foreign markets if the exporting country is more financially developed.Food&Beverage Industry,Economic Theory&Research,Markets and Market Access,Labor Policies,Debt Markets

Investment in Relationship-Specific Assets: Does Finance Matter?

Existing literature sees opportunistic behaviour of contractual partners as the main reason why rational agents underinvest in relationship-specific assets. We look beyond this well-know holdup problem and argue that financial vulnerability and short-term planning horizon can also lead to such underinvestment. Subsequently, banks can stimulate growth-enhancing investment in relationship-specific assets by signalling creditworthiness and long-term planning horizon of their borrowers. We empirically confirm this hypothesis by showing that industries dependent on relationship-specific investment from their suppliers grow disproportionately faster in countries with a strong banking sectorfinancial development, relationship-specific investment, growth

Investment in Relationship-Specific Assets: Does Finance Matter ?

Existing literature sees opportunistic behaviour of contractual partners as the main reason why rational agents underinvest in relationship-specific assets. We look beyond this well-know holdup problem and argue that financial vulnerability and short-term planning horizon can also lead to such underinvestment. Subsequently, banks can stimulate growth-enhancing investment in relationship-specific assets by signalling creditworthiness and long-term planning horizon of their borrowers. We empirically confum this hypothesis by showing that industries dependent on relationship-specific investment from their suppliers grow disproportionately faster in countries with a strong banking sector. Our work establishes a novel channel through which finance affects the real economy. It also complements the literature that has stressed legally binding contracts as a standard way to promote investment in relationship-specific assets.financial development; relationship-specific investment; growth

Investment in Relationship-Specific Assets: Does Finance Matter?

We show that contract-intensive industries grow disproportionately faster both in countries with a high initial level of financial development and in the US states which deregulated their banking sector. These industries use a high share of relationship-specific inputs that can be purchased only via specific contracts with the suppliers. Accordingly, both firms in those industries and their suppliers face above-average levels of risk and transaction costs. Our empirical results thus confirm the theoretical claim that finance promotes the real economy via managing risk and decreasing transaction costs. Furthermore, the pro-growth effect of finance seems to come from financial intermediaries like banks rather than from stock markets. This suggests that the intrinsic functions of relationship-banking (long-term commitment, increase in reputation and planning horizon of the borrowers) are especially important for the contract-intensive industries.financial development; relationship-specific investment; growth

Investment in Relationship-Specific Assets: Does Finance Matter?

We show that contract-intensive industries particularly thrive both in countries with high initial level of financial development and in the US states that deregulated their banking sector. These industries use high share of relationship-specific inputs that can be purchased only via specific contracts with the suppliers. Accordingly, both firms in those industries and their suppliers face above-average levels of risk and transaction costs. Our empirical results thus confirm the theoretical claim that finance promotes real economy via managing risk and decreasing transaction costs. Furthermore, the pro-growth e¤ect of finance seems to come from financial intermediaries like banks rather than from stock markets. This suggests that the intrinsic functions of relationship-banking (long-term commitment, increase in reputation and planning horizon of the borrowers) are especially important for the contract-intensive industries.financial development, relationship-specific investment, growth