This article outlines the ways in which corporations are powerful and can realize their interests in society and policy, through a case study of Corporate Average Fuel Economy (CAFE) standards in the U.S. It diverges from the main bodies of literature on corporate power—which focus more on corporate actions in the formal policy process (such as lobbying or campaign contributions) or on the structural dependence of the state on capital—by showing how corporate-led material and ideational societal change was key to the realization of corporate interests in formal policy, as corporate-led societal change reshaped the baseline from which policy was made. Additionally, through the case study, this article offers a new conceptual language for corporate power, and demonstrates how to approach and test power analysis with a sensitivity to both the temporal element of power and an understanding that power can operate beyond the formal political arena. This original case study, then, is significant in that it should encourage political economy scholars to adopt a broader societal focus, to work with a more comprehensive understanding of power, and to utilize longer study timeframes when seeking to assess corporate power.

What explains business views regarding policy preferences in the Eurozone crisis? Although recent literature examines the impact of the crisis on citizen views, few studies examine business preferences towards adjustment policies. We present unique data from a new representative survey of 500 high-level firm representatives from Spain to test theories about such preferences, in particular views about the euro, fiscal austerity, and wage devaluation, as well as plausible mechanisms for such preferences. We test three broad families of theories to explain such preferences, focusing on the role of structural firm characteristics, economic hardship, and political leanings of firm managers. We find that first, there is a strong conservative position regarding all of these policies. Second, we find that contra conventional approaches to explaining preferences, for the domestic policies (but not for euro views), the political leanings of firms matter much more than baseline structural characteristics. Third, we find that surprisingly economic hardship does not cause firms to demand more left-wing policies, as it might for voters; in fact, firms that have suffered are likely to be more skeptical of such measures. These findings indicate the need to better measure political orientations of firm respondents and suggest that this is a larger division among firms than previously recognized.

The global energy industry is transforming as governments invest in clean energy technologies to address climate change, enhance energy security, and strengthen national competitiveness. Comparative research on clean energy transitions highlights the domestic drivers and constraints of clean energy transitions. This article contends that we need to understand the effects of global interdependence on clean energy transitions. Shifts in forms of interdependence between firms—influenced by the rise of global supply chains—have new implications for policy choices made by governments. Governments face more complex demands from domestic industries facing global economic competition, and act strategically in response to the actions of other governments, including sub-national actors, and firms in the global economy. We suggest that research on interdependence in clean energy transitions benefits from an analytical focus on mechanisms of transnational change such as cross-national and multi-level policy feedback and cross-national policy sequencing. Global interdependence has important implications for economic and environmental outcomes, affecting the durability of competitive advantage, and influencing the pace of the diffusion of clean energy technologies.

Researchers have extensively studied how large firms and SMEs use business and political ties to obtain tangible and intangible resources in transition economies. However, how SMEs establish these ties in the context of power-imbalanced dependence by using unethical and illegal “strategic practice” such as bribery remains underexplored. Furthermore, how SMEs deploy strategies to mitigate such risky actions in the process of resource acquisition is also given limited attention in the literature. Lack of exploration of these issues leaves significant gaps in our understanding of how SMEs are able to initiate and operate their ties for survival and growth despite enormous institutional constraints. We analyze the negative and positive effects of power dependence on business resource acquisition via regression analysis using survey data drawn from 232 Chinese SMEs. The findings indicate that power-imbalanced dependence among SMEs is associated with their use of bribery to establish political ties with officials for access to resources. The moderating effect of power-mutual dependence on this relationship is also examined. Theoretical significance and managerial implications of these findings for SMEs in transition economies are discussed.

In a globalized and hegemonically organized international economy, the economic fundamentals and policy choices of the hegemon often have spillover effects for peripheral economies. This is a well-recognized dynamic of the contemporary political economy, but it was true during the first age of globalization as well. Motivated by literature examining the impact of the U.S. macroeconomic conditions on other economies throughout the international system, this article advances a systemic theory of financial crisis and applies it to the long nineteenth century, when British hegemony reigned. My main motivation is the earliest example of a systemic theory of financial crisis, Charles Kindleberger's Hegemonic Stability Theory. However, while Charles Kindleberger focused on the stability brought about by a hegemonically structured international economy, I emphasize the dynamics of volatility present in this type of system. I argue that a hierarchical distribution of economic activity in the international system means that the financial cycle of the most central country influences the financial conditions in peripheral countries that lead to financial crisis. Evidence from financial crises which occurred in the long nineteenth century supports this theory.

Building on the growing debate on political determinants of foreign direct investment, we investigate the relationship between U.S. political influence and the global distribution of China's outward foreign direct investment (OFDI). Using country-level and firm-level datasets of China's greenfield investment, we find strong evidence that Chinese state controlled firms strategically reduce investment in host countries under significant political influence of the United States. Our results are robust to alternative specification and two falsification tests. The findings suggest that the Chinese government uses FDI as a way of economic diplomacy.

Technology costs and deployment rates, represented in experience curves, are typically seen as the main factors in the global clean energy transition from fossil fuels towards low-carbon energy sources. We argue that politics is the hidden dimension of technology experience curves, as it affects both costs and deployment. We draw from empirical analyses of diverse North American and European cases to describe patterns of political conflict surrounding clean energy adoption across a variety of technologies. Our analysis highlights that different political logics shape costs and deployment at different stages along the experience curve. The political institutions and conditions that nurture new technologies into economic winners are not always the same conditions that let incumbent technologies become economic losers. Thus, as the scale of technology adoption moves from niches towards systems, new political coalitions are necessary to push complementary system-wide technology. Since the cost curve is integrated globally, different countries can contribute to different steps in the transition as a function of their individual comparative political advantages.

Models of distributive politics often assume that fixed budgets constrain the efforts of incumbents to retain power. Yet, significant variation exists in politicians' abilities to push distributive costs forward by funding current fiscal policy through sovereign borrowing. This article theorizes how and when variation in sovereign credit access influences the central goal of democratic incumbents: political survival. Credit allows incumbents to reward supporters without immediately extracting domestic revenue. Excessive borrowing, however, risks higher interest rates or possible market exclusion. Considering sovereign borrowing's benefits and costs, we argue that the marginal effect of credit access on political survival is greatest for those incumbents that require other parties to implement fiscal policy. An analysis of incumbent party tenure in seventy-one democracies from 1977–2007 demonstrates that affordable sovereign finance is associated with longer tenures under divided government but has no significant effect on survival under unified governments.

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.

We examine whether engagement in rent-seeking improves firm value in China. Rent-seeking is defined as a firm's use of resources to establish a relationship with the government to obtain government-controlled resources. We incorporate political rents and associated costs into an analytical framework to examine the relationship between rent-seeking and firm value. Using a sample of non-state-owned firms listed on the Shenzhen Stock Exchange and the Shanghai Stock Exchange from 2007 to 2013, we find evidence of the presence of political rents in the form of government subsidies and evidence of associated costs in the forms of corporate philanthropy and excess management remuneration, which largely explains the insignificant relationship found between rent-seeking and firm value. Our further analysis shows that rent-seeking behavior of firms reduces production efficiency, providing additional evidence to support our thesis that engagement in rent-seeking does not enhance firm value in the Chinese context. In an economy with weak institutions, in particular with weak protection for shareholders, managers and politicians can become rent-seekers and take a considerable share of the economic benefits derived from rent-seeking.

E.U. and U.S. businesses in China are actively shaping the business environment according to their interests. As a state-corporatist framework is applied, the question arises as to how Western businesses go about lobbying China's policies. This article provides insights on what kind of lobbying tools Western interest groups apply to actively influence China's party state. Drawing on a large data set of lobbying actions toward indigenous innovation policies, this article aims to demonstrate that China's political system is receptive to influence from the outside. The argument builds on evidence showing that China's state corporatist system provides some leeway for pluralist lobbying strategies. It is hypothesized that Western interest groups are not completely co-opted by China's state-corporatist system, which increases the number of membership driven lobbying strategies. As Western groups stand outside the system, they are expected to devote their lobbying efforts to the international level. Specifically, this article analyzes how constrained access in domestic China affects transnational venue shopping versus domestic strategies.

Why do private banks lend preferentially to politically connected firms? Focusing on the case of Egypt during the later years of Mubarak's rule, we identified politically connected firms, and we documented, using the Orbis corporate data on large firms in Egypt, that they received a disproportionate amount of the loans going to the private sector during 2003–11. We then investigated the determinants of their borrowings, and we found evidence that connected firms were more attractive to banks both because they made larger profits, and because they were seen to be implicitly guaranteed by the state against failure. We also found evidence that non-connected firms had a lower demand for loans.

As renewable energy supply chains have grown increasingly globalized, national clean energy transitions have become highly influenced by international dynamics. However, these dynamics are themselves collectively shaped by domestic policy that drives the deployment of renewables. While spatial spillovers of domestic renewable energy policies have been studied on an aggregate level regarding policy diffusion or the flows of technology across countries, implications on an actor-level have been largely neglected. This article addresses this gap by analyzing global patterns of market openings for wind, solar PV, and biomass, focusing on the role of private project developers in developing countries. We use a mixed method design, based on a newly merged dataset encompassing eighty countries, and on interviews with pioneering project developers. Results highlight how patterns in market openings are shaped considerably by technology characteristics. Further, empirical results show international private developers are a key first mover in many developing countries. We explore drivers for this internationalization trend, including the impact of international developers' home country policies and the accumulation of tacit knowledge from home country markets for market openings abroad. Finally, we discuss implications for industrial policy and argue for further research on global spillovers of national policies on the actor-level.

While many scholars have studied “urban bias” in public policy, the potential for bias in the private provision of public goods has received little attention. Private certification is a mechanism encouraging private provision of environmental public goods. We show that within countries, there are often wide disparities in certification rates between firms located in urban and non-urban areas. However, these disparities can be mitigated if there is a countervailing force: scrutiny of firms' practices by key stakeholders. We suggest that the presence of strong civil society, independent media, a functioning state regulatory apparatus, and multinational owners can ameliorate the urban bias in certification uptakes. We test this argument with global, firm-level data covering over 40,000 firms in ninety-three countries. Our analyses suggest that an urban bias is mitigated when stakeholders—both public and private—have the freedom and capacity to scrutinize firms' activities.

Scholars and politicians in recent years have become concerned with rising levels of inequality among Americans, heightened in the aftermath of the 2010 Supreme Court decision in Citizens United v. F.E.C. The suspicion over an ever larger influence of corporate and elite interest over public policy has brought about significant public backlash, even becoming a key platform of reformist candidates such as Sen. Bernie Sanders. In large part, these fears have yet to be realized, as many corporations have chosen to remain on the sidelines in American elections and have not fully taken advantage of their newfound rights. At the same time, we have observed a stark rise in corporate lobbying expenditures in recent decades. What explains the puzzle of how corporations choose to engage in new or expanded forms of political activity, and even what drives the spread of corporate norms? This study investigates the conditions under which corporations may come to embrace political action.

What explains subnational policy choices over tax cut after decentralization? We test two different explanations in the context of the 2002 tax reform in Russia. A popular strand of literature suggests that decentralization induces more regional competition over investment, motivating subnational tax cuts. A second body of literature suggests that personal business interests of regional governors can account for their different policy choices. Governors with personal business ties refrain from tax cuts because they increase market competition. We find no support for the regional competition hypothesis, but strong statistical evidence for the business connection hypothesis. Our findings have important implications for research on fiscal decentralization and on the connections between business interests of leaders and their policy choices.

While regulators, firms, and the courts must all be able to interpret regulations to best address economic and social issues, regulatory interpretation may vary greatly across parties. After introducing a framework to explain the impact of the complexity of written regulations and the complexity of the regulatory environment on regulatory interpretation, this paper utilizes regulatory examples to explore the challenges associated with regulatory interpretation. Several recent initiatives designed to improve regulatory efficacy are examined to assess potential methods available to reduce challenges associated with regulatory interpretation. When considered with the public policy implementation literature and research on networks in public policy, several implications emerge from the consideration of regulatory interpretation and recent regulatory initiatives. Regulators should pursue strategies to minimize the number of possible interpretations in the design of regulation and seek improved regulatory mechanisms to alleviate regulatory interpretation challenges. Furthermore, theoretical models should acknowledge regulatory interpretation to better assist in the design and implementation of regulation.

The increasing impact of the international trade governance regime on the domestic regulatory sphere and the growing inter-linkages between international companies through their involvement in global value chains, have complicated corporate political activity (CPA) in the trade arena and changed the way companies interact with governments in this context. This paper draws on several recent examples of novel forms of CPA in trade conflicts at both multilateral and regional (E.U.) level, to provide an updated conceptual framework of trade policy CPA, which takes account of the increasing complexity and interconnectedness in the world economy. We highlight, in particular, the fact that this changing context means that “domestic” interests are often heterogeneous. The international linkages of a firm may dictate trade policy preferences more than its nationality. In addition, non-government actors increasingly react to globalization by mobilizing transnationally, with positive and negative impacts for CPA. CPA strategy has adapted to that reality, in both home and host country contexts, leading to novel cross border alliances and even political activity in countries where, although their local presence is relatively low, companies find common interests.

Scholarship in international political economy (IPE) has noted the rise of resource nationalism in since the early 2000s. Despite the increased presence of state regulation in the resource sector, resource nationalism has not been incompatible with foreign investment. This article contributes to better understand resource nationalist policies that emerged in recent years and offers new theoretical insights to explain state-IOC relations by integrating obsolescing bargaining theories and constructivist approaches. Drawing on the case of Venezuela, this article explains how the Chávez regime pursued a hybrid model of control and welcoming of investments in the oil sector. The article argues that both bargaining insights and ideational considerations are important in explaining this model. In the context of high oil prices and sunk investments, it is unsurprising that a leftist government would seek to renegotiate contracts to seek better deals from extractive companies. Yet, focusing exclusively on those incentives misses important ideational drivers for the government to keep investors in the country. For Chávez's government, effecting changes in the oil policy was possible after waging an intense battle with its NOC, PDVSA, over control. Association with foreign investment became crucial to build its socialist model and to control its own company.

Governments support clean technologies to advance both environmental goals and national competitiveness. By adopting environmental policies early on, governments are argued to create durable competitive advantages for domestic companies that develop clean technologies for export to late adopters. This paper argues that policy competition between lead and follower markets conditions the ability of governments to create durable competitive advantages in low-carbon technologies. Depending on the complexity of the technology, we observe two patterns of green industrial policy competition. In low-complexity technologies, such as solar photovoltaics, follower markets are likely to adopt policies that support manufacturing capacity to rapidly achieve price advantages from economies of scale, with global supply chains intensifying this competition (“scaling up”). In high-complexity technologies, such as electric vehicles, follower markets are likely to adopt policies that support research and development to develop differentiated high-tech products for export (“innovating up”). We also suggest that new forms of interdependence in policy competition can affect the political sustainability of lead market policies. Competition in scaling-up is more likely to undermine political coalitions in favor of government support for low-carbon technologies, while innovating-up dynamics embed political coalitions that support lead market policies for low-carbon technologies.