Germany is pivotal to the success of any trade agreement between the European Union and the United States. As the third largest exporter in the world, Germany is dependent on open markets; throughout the post-war period, government support for free trade has been unequivocal. Despite these positive incentives for expanding free trade, both German business and the wider public voiced fierce opposition to the Transatlantic Trade and Investment Partnership (TTIP). TTIP became a flash point for the German public to overcome collective action problems and create a broad protest movement against a free trade agreement for the first time in German history. This movement enabled the public to successfully exercise influence on German foreign economic policy-making, which had long been protected from public pressure. By 2015, the success of that pressure in penetrating the policy-making apparatus combined with growing government concern about the potential of international firms to undermine national policy. As a result of the confluence of these two forces, German leaders changed their position in TTIP negotiations.

Recent research has shown that alliances between policy makers and investors can be very effective in enhancing investment and growth. Drawing on the case of Egypt, this paper asks where such growth alliances come from, how they evolve over time, what their key features are, how they work, in what circumstances they do good rather than harm, and whether they can be constructed for policy purposes.

This paper addresses the intersection of coalition formation, judicial strategies, and regulatory politics. Coalitions are a low-cost means for assembling minority interests into more powerful blocs. However, in most cases in regulatory politics, judicial strategies are high cost efforts. I argue that coalitions among interests form one basis for judicial participation, but that participation manifests in an array of coalition “microstructures.” For any one event, the microstructure of the interest group coalition varies, but across events the coalitions take on general forms. The paper offers evidence for a variety of coalition microstructures in interest group participation as amici curiae (“friends of the court”) in cases before the United States Supreme Court. The evidence is drawn from the case of the Group of Ten, a stable, long-term coalition of environmental interest groups that operated from 1981 to 1991.

Climate change mitigation relies increasingly on clean technologies such as renewable energy. Despite widespread success, further deployment of renewables has been met with resistance from voters and governments in several countries. How resilient is the renewable energy industry to adverse political events? I use the unexpected election of Donald Trump in the 2016 U.S. presidential race to study this question. As a vocal critic of renewables and a supporter of fossil fuels, his election is a plausible negative shock to the renewable energy sector. I examine stock market data to gauge the reaction of investors. I find that renewable energy stocks were adversely affected by the election. Overall, they experienced a cumulative abnormal loss in share values of about 6 percent on average over the twenty days that followed the election. However, I find that the negative effect is concentrated among non-U.S. firms. U.S. firms, on average, emerged unscathed. Non-U.S. companies, on the other hand, lost over 14 percent of their value in the aftermath of the election. This suggests that markets are more concerned by increasing obstacles to international business than a decrease of federal support for renewables.

Despite recent currency crises, most of the Asia-Pacific economies continue to be among the most attractive markets in the world and now appear to be recovering rapidly. An important element in understanding the dynamics of firm strategies in Asia is the nature of nonmarket strategies, which concern efforts to respond to and influence the political-economic-social environment. To examine such nonmarket strategies and how they fit with other firm tasks, this article first focuses on “positional analysis”—that is, how market forces, firm competencies, and the nonmarket environment influence the choice of trade, investment, or some mix, at the national, regional, or global level. It then considers the nature of “strategic analysis,” consisting of a firm's choices of market arena, a transaction cost analysis of organization forms for market penetration, and a distributive politics analysis of nonmarket issues. These factors combine to influence the firm's integrated strategic choice. Implementation of this choice is based on “tactical analysis” that focuses on the market, organizational, and nonmarket tactics that firms must pursue to succeed with their chosen strategy.

The corporate responsibility to respect human rights was formally introduced in 2011 with the unanimous endorsement of the UN Guiding Principles on Business and Human Rights (UNGPs) by the UN Human Rights Council. It is grounded in social expectations and forms part of the companies' “social license to operate.” This paper argues that this responsibility is progressively turning into a legal duty for lead companies to respect human rights in those types of value chains which are characterized by a high level of control by a lead company over its business partners. Our argument rests on two recent legal developments. Firstly, the article analyzes the judicialization of the corporate responsibility to respect in the case law on parent company liability in various jurisdictions, which, we argue, is highly likely to have some implications in relation to certain types of value chains so as to trigger the liability of lead companies for the human rights harms arising out of the activities of entities over which they exercise sufficient control. Secondly, the article delves into the legislative developments which increasingly require lead companies to exercise due diligence so as to prevent and address adverse human rights impacts in their own activities and global value chains.

This paper contributes to both corporate political activity (CPA) research and capabilities theory research by offering models that better describe the process that managers undertake to nurture a political capability. This is done through the interplay of four factors inherent in political actions, namely (i) corporate structure, (ii) firm-government linkages, (iii) political access and (iv) public policy pressure. Additionally, recognizing that political capability attainment is not a binary endeavor, I offer a political capability continuum to better categorize the magnitude by which differing firms allocate resources toward molding public policy. This paper adds to the scant literature on management-focused CPA research that integrates the resource-based view (RBV) of the firm and political action research.

This special issue of Business and Politics examines how multinational corporations (MNCs) respond to the twin pressures of globalization and localization when implementing corporate responsibility (CR) policies. While MNCs are often viewed as agents of global economic integration, MNCs are impacted by globalization pressures, often in ways they cannot adequately control. As economies globalize, so do politics and stakeholder expectations that MNCs must negotiate as they manage their global operations. Working from the premise that CR strategies need to cohere with product and factor market strategies, the papers in this special issue make two contributions. First, they suggest that CR is an integral component of MNCs’ market and non-market strategies. Second, in addition to multi-domestic CR strategies, MNCs should consider international and global CR strategies as well.

In 2008 and 2009, the House of Representatives directed billions of dollars to the auto industry by passing a bailout and the “cash for clunkers” program. Moving beyond corporate influence via campaign contributions, we demonstrate that the presence of auto workers in a district strongly predicts legislative support for both bills. In addition to this critical legislation, we also analyze over 250 bills on which the auto industry either lobbied or took a public position. We find no patterns relating a district's workers or corporate campaign contributions to these votes on broader legislation where other groups, such as environmental advocates or labor unions, are at the table. Instead, the auto industry garners consistent support only on quasi-private, particularistic legislation. Thus, we contend that on particularistic legislation the presence of workers (not just campaign contributions) drives legislative support; however, when legislators expand the scope of conflict, the influence of a single industry is attentuated by other interests.

Drawing upon a comprehensive database of contemporary protectionism, this paper offers an initial assessment of the extent to which our understanding of protectionism may have to evolve. While some long-standing features of protectionism appear to have endured (such as the distribution of discriminatory measures across economic sectors), specific corporate needs arising from the global financial crisis and particular national attributes are more likely to have influenced the choice of beggar-thy-neighbor policy instruments than binding trade rules and other international accords.

Business and public partnerships in socially responsible behavior have become a central pillar of global governance, but one that is unevenly developed in different countries. Despite the transnational character of business operations, national context is of theoretical as well as policy significance. To explain cross-country variation in corporate commitment to social responsibility we investigate the political conditions that encourage firms to participate in the United Nations Global Compact. Drawing on a theory of corporate social responsibility as motivated by self-interest and external pressure, we examine the influence of external actors and the locally specific mobilization of bias. Analyzing participation levels in 145 countries, we find that a democratic regime and Global Compact participation by countervailing groups are associated with higher levels of business participation in the program. Contrary to earlier studies relying on smaller numbers of countries, we find no evidence that a country's relationship with the UN or the domestic political strength of environmental interests account for cross-national variation in corporate engagement with the Global Compact.

When can complex multi-round environmental policymaking like that seen in climate be successful? An emerging branch of literature examines how sequencing matters to success and under what circumstances path dependent dynamics can lead to increasingly stringent climate and environmental policy. Here, I propose an industry typology that divides industry into four categories based on their relationship and likely response to early regulatory policy moves. I use a series of case studies that compare the application of this typology across issue areas internationally, looking comparatively at ozone and climate change policymaking; and subnationally across U.S. states in the climate change issue area. Using these case studies, I show how this model for understanding different mixes of industry type can help us understand and predict the likelihood of policy-industry feedback that leads to increasing environmental and renewable energy policy success over time, both at the international level and comparatively across national and sub-national jurisdictions.

State-owned enterprises (SOEs) retain a strong presence in many economies around the world. How do governments manage these firms given their dual economic and political nature? Many states use authority over executive appointments as a key means of governing SOEs. We analyze the nature of this “personnel power” by assessing patterns in SOE leaders’ political mobility in China, the country with the largest state-owned sector. Using logit and multinomial models on an original dataset of central SOE leaders’ attributes and company information from 2003 to 2017, we measure the effects of economic performance and political connectedness on leaders’ likelihood of staying in power. We find that leaders of well-performing firms and those with patronage ties to elites in charge of their evaluation are more likely to stay in office. These findings suggest that states can leverage personnel power in pursuit of economic and political stability when SOE management is highly politically integrated.

Using several case studies and data from the Economic Freedom of the World annual report and from the CIRI Human Rights Data Project, we estimate the effect of human rights abuses on economic liberalization. The data suggest that human rights abuses reduce rather than accelerate the pace of economic liberalization.

This paper investigates the importance of variations in judicial institutions after a ‘shock’ has unraveled a regulatory status quo. State court decisions involving utility regulation are examined. Appointed state courts are generally agreed to be more independent than elected state courts. Before 1970, the primary participants in the process of utility regulation (and thus its largest beneficiaries) were the regulated firms and their commercial customers; afterwards, utility regulation increasingly accommodated consumer groups as well. Certain scholars have proposed that independent courts help keep administrative agencies from deviating from the original wishes of their political principals, and thus might be expected to slow down such changes in regulatory approach (which occurred with few alterations to the governing statutes). Other scholars have proposed instead that independent courts can decide as discretion dictates, and may thus lead such changes. The results of this analysis provide support for the latter view: controlling for other factors (such as partisan affiliation), more independent appointed courts sided more often with consumer groups while less independent elected courts sided more often with regulated firms and their large commercial customers.

Industry lobbying is traditionally thought of as a non-excludable good subject to collective action problems that are most easily solved by concentrated industries. However, there is very little empirical support for this hypothesis. In this paper, we address a major shortcoming of existing work on the topic: Its near-exclusive reliance on data from the US. Using comparative firm-level survey data from up to 74 countries, we construct an industry-level indicator of concentration and test its effect on firms’ lobbying activity. Using multilevel Extreme Bounds Analysis and Bayesian Variable Selection techniques to account for model uncertainty, we find no evidence that industry concentration is a predictor of lobbying activity. We discuss the implications of these non-findings for the literature and outline possible avenues for further research.

This paper establishes a model for analyzing the dynamics of the host state-international oil company (IOC) bargaining relationship. Theoretically, the model advances our ability to investigate bargaining dynamics between host states, oil companies and other stakeholders in the oil industry. It is a sophisticated mechanism which identifies the complex array of relationships and bargains within which the host state-IOC bargaining relationship is nested. The model builds on and leverages the key contributions of earlier bargaining models. It enables us to integrate relevant ideas from existing scholarship on host state-MNC bargaining while also taking into account other actors and bargains at domestic and international levels that affect bargaining between an IOC and a host state. Practically, the model will help actors choose strategies more systematically, leading to higher relative bargaining power that may translate to preferable bargaining outcomes.

Private regulation has become a highly debated phenomenon. Previous research has focused mostly on the effectiveness, legitimacy, and governance structure of private regulators at the global level. Few existing analyses have focused on private regulation at the European level, where only questions of interest representation have attracted attention. Analyses of the contribution of private regulation to the process of European legal integration, in particular, are lacking. We seek to fill this gap. From private rules for product safety and for financial markets, such as the Single Euro Payments Area standards, to private rules governing the professions, we observe that private regulation has facilitated and accelerated European legal integration. We argue that in some cases this effect was anticipated, especially by the European Commission, and in those cases the intended effect on European legal integration at least partly explains the rise of private regulation. I other cases, it was an incidental by-product of attempts to address market failures or achieve network legitimacy. In the conclusion, we turn to questions of accountability and legitimacy raised by the increasing importance of private regulators in the Common Market of the EU. Although the EU lacks a body of rules that imposes democratic controls on private regulators, we identify components of European law that can be used as control mechanisms.

In the last decade, few countries have figured prominently as cases of late-late developers that achieved worldwide success with their Information Technology (IT) industries. This paper focuses on the Israeli case and argues that uniquely in that group, and in contradiction to the model proposed by late development theories, Israel's competitive advantage in the IT industries, is in Research and Development (R&D). The paper's main arguments are that (a) the declared aim of Israel's industrial policy has been to develop a “science-based” industrial system similar to what we see in Israel today; (b) however, these policies, focused on diffusion and not on creation of capabilities, were successful only because of the existence of an already sophisticated and extensive R&D capability in the universities – markedly different from other Newly Industrialized Countries. Looking at the present the paper concludes that the same operational model that led Israel's IT industry to success might now be undermining its future growth.

ASEAN countries perceive the possible formation of the FTAA as a potential threat on the grounds that it may divert export markets and foreign direct investment (FDI) capital to the FTAA region. This effect, together with the “China factor” and the hangover from the 1997 financial crisis, posts a concern to the ASEAN countries' economic growth. We show that, with Singapore as an exception, ASEAN countries are afflicted with state activism, poor property rights protection, and under-developed corporate governance. We argue that a poor institutional environment may exacerbate the effects of an external shock – such as that of FTAA – and thus we need to explicitly incorporate the role of institutional environments in our analysis. We further argue that while FDI flows to locations with market opportunities, a location's institutional environment affects the composition of FDI. Due to ASEAN countries' institutional weakness, its substantial inward FDI has mainly substituted, rather than complemented, local entrepreneurship. As FTAA may divert FDI flows into ASEAN countries, their appropriate response is to improve institutional quality so that the share of the more productive complementary FDI will increase in the total FDI inflows.