Motives of corporate political donations: Industry regulation, subjective judgement and the origins of pragmatic and ideological corporations

• Main Author: HARRIGAN, Nicholas M.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2017
• Subjects: Business; industry; politics; regulation; donations; elites; agency; Business Law, Public Responsibility, and Ethics; Sociology; Work, Economy and Organizations
• Online Access: https://ink.library.smu.edu.sg/soss_research/2276; https://ink.library.smu.edu.sg/context/soss_research/article/3533/viewcontent/Harrigan__MotivesCorporatePoliticalDonations_2017_pp.pdf
• Institution: Singapore Management University

What motivates corporate political action? Are corporations motivated by their own narrow economic self-interest; are they committed to pursuing larger class interests; or are corporations instruments for status groups to pursue their own agendas? Sociologists have been divided over this question for much of the last century. This paper introduces a novel case - that of Australia - and an extensive dataset of over 1,500 corporations and 7,500 directors. The paper attempts to understand the motives of corporate political action by examining patterns of corporate political donations. Using statistical modelling, supported by qualitative evidence, the paper argues that, in the Australian case, corporate political action is largely motivated by the narrow economic self-interest of individual corporations. Firms’ interests are, consistent with regulatory environment theory, defined by the nature of government regulation in their industry: those in highly conservative partisanship or hedging is not just a product of the objective regulation they face, but also whether corporate leaders judge such regulation as politically inevitable or something that can be resisted. Such a judgement is highly subjective, introducing a dynamic and unpredictable dimension to corporate political action.