Transnational Public-Private Initiatives and Domestic Corporate Lobbying

• In Event: Institutions and Climate Change

Abstract

Business and civil society actors are emerging prominent forces in global governance. Such private actors collaborate with states to govern intricate transnational challenges, increasingly through formulating public-private governance initiatives. Can public-private governance initiatives empower firms to engage in domestic lobbying effectively? Although existing studies extensively debate the potential of these initiatives to improve the self-regulation performance of their participants, we still know little about the impacts on corporate political behavior, such as domestic lobbying. In contrast with traditional lobbying that typically caters to narrow and private interests, public-private initiatives tend to represent a wider array of stakeholder concerns and should be less likely to mobilize firms for lobbying effectively. However, I argue that public-private initiatives can serve as a transnational network that facilitates the sharing of experience and knowledge, thus connecting and mobilizing like-minded firms to lobby governments. Moreover, the legitimacy conferred by transnational networks also helps firms enhance their reputation and establish trust with domestic policymakers. Leveraging a panel dataset of large-size firms headquartered in the U.S. from 2002 to 2022, this research empirically examines whether firms with the United Nations Global Compact (UNGC) membership impact corporate domestic lobbying, particularly in the environmental and energy arenas. My results show that while the UNGC does not explicitly encourage political engagement among its members, its membership can increase firm-level lobby efforts in the U.S. Furthermore, the findings suggest a conditional effect that UNGC signatory firms with lower climate-related risks demonstrate a higher propensity to lobby governments than non-member firms. Lower transition costs enable firms with higher climate resilience to align more with UNGC principles, thereby enhancing their credibility in conducting lobbying activities. These findings highlight the role of transnational public-private governance initiatives in domestic corporate political behavior.

Author

• Mengying XIE, School of Public Policy and Management at Tsinghua University