Jean-Philippe Bonardi

ASSET FREEZING, CAMPAIGN CONTRIBUTIONS AND THE TULLOCK PARADOX

Jean-Philippe Bonardi et al. — Tue, 01 Nov 2011 13:39:22 PDT

In 1967, Gordon Tullock asked why firms do not spend more on campaign contributions, despite the large rents that could be generated from political activities. We suggest in this paper that part of the puzzle comes from the fact that one important type of political activity has been neglected by the literature, which focuses on campaign contributions or political connections. We call this neglected activity “asset freezing”: situations in which firms delay lay-offs or invest in specific technologies to support local politicians’ re-election objectives. In doing so, firms bear a potentially significant cost as they do not use a portion of their economic assets in the most efficient or productive way. In this paper we consider U.S. employment data to explore asset freezing behaviors around election times. We find behaviors consistent with one of our initial hypotheses. We then develop a simple model in which financial contributions and freezing assets are alternative options for a firm willing to lawfully influence public policy-making, and derive some of our initial hypotheses more formally. One Hypothesis, in particular, fits the US employment evidence collected: large firms are the most likely to substitute campaign contributions with asset freezing activities.

CORPORATE POLITICAL ACTIVITY AND THE DEVELOPMENT OF POLITICAL KNOWLEDGE

Jean-Philippe Bonardi et al. — Mon, 29 Aug 2011 09:34:16 PDT

Corporate political resources and the resource-based view of the firm

Jean-Philippe Bonardi — Thu, 25 Aug 2011 13:30:08 PDT

The challenges of theory building through the combination of lenses.

Jean-Philippe Bonardi et al. — Sat, 05 Feb 2011 06:57:47 PST

International expansion, diversification and regulated firms' nonmarket strategy

Jean-Philippe Bonardi et al. — Wed, 24 Jun 2009 01:11:07 PDT

Previous studies have shown that regulated firms tend to diversify for different reasons than unregulated ones. This is the case for product but also for geographical diversification, i.e. international expansion. The logic generally advanced is that regulated firms tend to diversify when they face costly and difficult relationships with the regulatory authority in charge of their sector. This approach, however, does not explain (1) what is really at the core of the problem in regulated firms’ relationships with regulators, (2) why these firms cannot overcome part of the problem by developing nonmarket strategies –lobbying, campaign contributions, etc.– to influence regulatory decisions, and (3) why they sometimes opt for international expansion rather than product diversification. In this paper, we propose a theoretical model that provides potential answers to these questions. We start by considering the firm-regulator relationship as an incomplete information problem, in which the firms know things that the regulator does not, but can cannot convey hard information about these things. In this setting, we show that when firms face tough nonmarket competition domestically, going abroad can create a mechanism that makes information transmission credible and therefore strengthen their position in their home market. International expansion, in consequence, can be a way to solve some of the problems that regulated firms face at home in addition to a way for these firms to grow their business abroad.

The political economy of regulatory convergence in public utilities

Jean-Philippe Bonardi et al. — Thu, 04 Sep 2008 11:04:21 PDT

To what extent should public utilities regulation be expected to converge across countries? When it occurs, will regulatory convergence lead to positive outcomes for utility sectors? This paper attempts to provide new answers to these questions. Building on the core proposition of the New Institutional Economics (NIE) that similar regulations generate different outcomes depending on their fit with the underlying domestic institutions, we develop a simple theoretical model and explore its implications by examining the diffusion of local loop unbundling (LLU) regulations in the telecommunications sector. We find support for the ideas (1) that once institutional factors are taken into account, one should expect some convergence in public utility regulation but with still a significant degree of local experimentation, and (2) this process will lead to very different results regarding the impact of regulation.

The internal limits to firms' nonmarket activities

Jean-Philippe Bonardi — Thu, 04 Sep 2008 10:55:40 PDT

It is well documented that firms develop nonmarket strategies in an effort to shape public policy changes to their advantage. But are there no limits to this? This paper argues that there is, in fact, an important limitation, internal to the firm, that stems from the necessity for firms to integrate market and nonmarket activities. Because the two types of activities are not always complements but sometimes substitutes, firms end up forgoing part of their nonmarket activities to avoid restricting the development of their market strategies. This argument is tested in the context of the European telecommunications industry. Results suggest that there is reasonable ground for optimism regarding the potentially negative influence that firms’ nonmarket activities might play in a democracy.

Nonmarket Performance: Evidence from U.S. Electric Utilities

Jean-Philippe Bonardi et al. — Mon, 15 Jan 2007 08:47:23 PST

Corporate Political Strategies for Widely Salient Issues

Jean-Philippe Bonardi — Mon, 15 Jan 2007 08:40:41 PST

The Attractiveness of Political Markets: Implication for Firm Strategies.

Jean-Philippe Bonardi — Mon, 15 Jan 2007 08:37:23 PST

Political and international strategies of former telecom monopolies: The Asymmetric Behaviors of Former Monopolies.

Jean-Philippe Bonardi — Mon, 15 Jan 2007 08:35:20 PST