Corporate political activity and firm performance: explicating the moderating effects of product and international diversification

Shirodkar, Vikrant, Rajwani, Tazeeb, Stadler, Christian, Hautz, Julia and Mayer, Michael (2016) Corporate political activity and firm performance: explicating the moderating effects of product and international diversification. In: Strategic Management Society annual conference, 16-20 September 2016, Berlin.

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Abstract

The association between corporate political activity and firm performance is contested. Considering both potential costs and benefits we examine the relationship between corporate political activity and firm performance by explicating the moderating effects of product and international diversification. The idea is that corporate political activity facilitates expansion into new product and international markets and hence justifies the costs occurred. Our results based on a sample of 737 U.S.-based firms show that corporate political activity is positively associated with performance for firms that are diversified in both international markets and along product-lines; whereas political activity is counter-productive for purely domestic and undiversified firms. Our results contribute to the literature on the nonmarket behaviour of firms by highlighting the roles of international and product diversification.

Item Type: Conference or Workshop Item (Paper)
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HF Commerce > HF5001 Business > HF5387 Business ethics
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Depositing User: Vikrant Shirodkar
Date Deposited: 16 Jan 2017 16:42
Last Modified: 16 Jan 2017 16:42
URI: http://sro.sussex.ac.uk/id/eprint/66216
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