Conference Programme

Research on corporate political activity (CPA) has long recognized firms’ efforts to shape their regulatory environments, yet much of this work treats CPA as a unified construct and evaluates its consequences through outcomes distant from the objects of political influence. Drawing on an institutional perspective, we argue that different forms of CPA are differentially suited to distinct arenas of regulatory governance and therefore have systematically different implications for enforcement outcomes. We distinguish between lobbying, which enables sustained engagement with administrative agencies during policy implementation, and campaign contributions, which primarily target elected officials during policy formation. We test these arguments using facility-level enforcement under the U.S. Clean Air Act from 2011-20, linking enforcement actions and penalties to parent-firm political engagement. Consistent with our theoretical framework, lobbying is associated with greater enforcement leniency, while campaign contributions exhibit no comparable association. We further show that the enforcement effects of lobbying are stronger in conservative political environments, highlighting the role of institutional receptivity in conditioning how political engagement translates into administrative discretion. By disaggregating CPA and situating political strategies within the institutional arenas in which enforcement decisions are made, this study advances a more precise theoretical understanding of how firms shape regulatory implementation.