Multinational corporations (MNCs) play significant roles in shaping the global economy. Despite the prevalence of the economic activities of MNCs across the globe, few studies exist that examine their political influence on foreign policy-making. This chapter develops a theoretical framework for understanding how MNCs’ unique positions in the market affect their political activities. Specifically, we argue that MNCs’ economic dominance reduces the relative cost of engaging in political activities, while their large-scale transnational activities increase the marginal benefits of influencing policy-making individually. To examine this empirically, we first introduce a novel dataset of lobbying in the US encompassing lobbying activities of all public firms from 1999 to 2019. We then employ the difference-in-differences identification strategy to estimate the effect of MNC status on lobbying. We find strong evidence for an increase in lobbying expenditures when firms become multinational. Furthermore, we find that MNCs tend to lobby on a more diverse set of foreign policy issues. Our findings suggest that MNCs are important political actors whose distinct interests and influence should be incorporated into our understanding of foreign policy-making>>ClickHere>>>
Tag: global economy
Coronavirus downturn likely to add to high government debt in some countries
In addition to its public health consequences, the coronavirus pandemic is likely to lead to an increase in government debt around the world. The global economy is projected to shrink 3% this year – a downturn that would likely cause tax revenues to fall – even as governments in the United States, Europe and elsewhere spend trillions of dollars on emergency relief measures to try to contain the damage >>ClickHere>>>