Essays on Lobbying and Government Relations
Abstract
This dissertation explores the strategic interactions between firms and governments through lobbying. It examines how firms’ internal resources and capabilities and their competitive market dynamics influence their lobbying strategy.
Essay 1 investigates how local stakeholder reactions to a firm's externalities shape its lobbying strategy. Using data on Airbnb’s geographical distribution and lobbying activities in Toronto, this study finds an inverted-U relationship between the local size of Airbnb’s rent chain and its lobbying intensity. Additionally, Airbnb was less likely to lobby in districts with a higher presence of hotels, which were established competitors with entrenched regulatory support. Conversely, opposition groups, such as activists and unions, were more likely to lobby in districts with a strong presence of both Airbnb and hotels.
Essay 2 examines how pre-existing relationships with senior public officials affect firms' lobbying access to these officials. This study argues that these relationships allow firms to understand policymakers' preferences and decision-making processes, build reputations for providing reliable information, and adapt to shifts in the political hierarchy. Analyzing contact-level lobbying data from the Canadian federal government’s Department of Industry and its successor, this study shows that firms with prior interactions with policymakers were more likely to maintain frequent contact after their promotion to senior minister and deputy minister positions.
Essay 3 focuses on the Government Relations (GR) industry’s role in lobbying. It analyzes the dynamics of GR firms in Canada from 2008 to 2023 and highlights changes in market share dominance after the 2015 federal election when the Liberal government took office. To understand these shifts, this essay presents two case studies. The first case study examines the telecommunications industry and finds that GR firms representing clients aligned with the new government's policy agenda experienced growth. The second study compares four GR firms that either grew or declined in their standing before and after the 2015 election. It finds that firms with partners who had prior experience with the Liberal Party or government, and those able to adapt to the new policy regime increased their lobbying activity to a greater extent. In contrast, firms with previous ties to the Conservative Party and those with large, inflexible operations struggled to realign and grow.