The relationship between business and politics is central to our understanding of the economy and society. However, the political impact of business varies across governance levels, countries, institutions, issues, and size and organization of the firm, and requires many disciplines to make sense of this complexity. Advanced Introduction to Business and Politics (by David Coen and Matia Vannoni, published by EE Publishing) draws on key concepts and insights from different disciplines, including economics, political economy, management and political science. In so doing, this book talks to those who study how business designs and implements effective lobbying strategies and those who look at how the government designs and implements public policy with the collaboration of business. In this panel, we will discuss the main insights from this book and propose promising avenues of future research for scholars in the field. We gather contributions that from a theoretical and disciplinary standpoint scrutinize the role of business in the provision of public goods and services, especially at the international level. In this regard, disciplines such as international public policy/political economy (IPP/IPE) and international business stand poised to offer significant contributions. Notably, the emerging trend of large corporations assuming more proactive roles in political and social spheres, exemplified by corporate social responsibility initiatives, underscores the evolving landscape of contemporary business-government relations. This is even more evident at the international level, and in the Global South, with more and more contemporary challenges requiring cross-border cooperation between the public and private sector at different levels of governance. Moreover, we gather contributions that focus on a micro-level analysis of business and government dynamics. Transitioning from a structural to an agent-based perspective holds promise not only for elucidating novel dynamics but also for facilitating the development of more inferential and rigorous analytical frameworks. This shift unveils nuances previously obscured by macro-level analyses, thus enriching our understanding of the intricate interplay between business and government actors. In this strand, we gather contributions that look at the interaction between business and bureaucrats, as well as business and legislators at the individual level.
New Avenues of Research in Business and Government Studies: the Micro-level Perspective
Dr. Matia Vannoni
Abstract
The 1990s marked a watershed in business and government relations from a micro-level perspective. Only then did companies start to develop the structures that allowed for permanent government affairs functions to emerge, differentiated from sectors such as legal and PR. The literature has slowly caught up with this trend ever since. The private management literature has started to look at the company as an organisation that comprises different rules, norms, routines and roles. This trend opened up the black box of the company and studies its internal structure. In this paper, I argue that this micro-level lens provides important opportunities for future research that scholars of business and government relations should consider. From a micro-level perspective, the firm is the primary unit of analysis. Specifically, the focus is on the decisions made by companies' government affairs offices and the factors that shape common trends and variations. This perspective allows new theoretical insights, as well as paves the way for the introduction of new data and methods in the study of business and government relationships.
Do Companies Benefit from the Revolving Door? Evidence from Companies’ Board Appointments
Dr. Elise Antoine
Abstract
The movement of former legislators, regulators, and others with political connections into private-sector roles has emerged as a central aspect of modern public governance (Dávid-Barrett, 2020; Mulgan, 2021). Yet its magnitude across sectors and regions remains unclear. Moreover, empirical research on the impact of hiring former politicians on company performance remains limited, both geographically and temporally.
This research addresses this gap, focusing on the board appointments of the world’s largest companies. Board positions indeed offer a strategic opportunity for firms to leverage the insider knowledge of former government officials. To investigate the impact of such appointments, we collect detailed data on board composition from the BoardEx dataset, which includes information on directors' and executives' educational backgrounds, prior employment, professional connections, and demographics.We then combine this data with company performance indicators from the Compustat database, creating a comprehensive dataset with over 3 million executive appointments across roughly 80,000 companies worldwide. This dataset allows us to implement a panel event study design, using company and individual fixed effects, to examine how the appointment of former politicians to corporate boards influences company performance. By comparing board members with government experience to those without, and analysing the same individuals and companies over time, we can isolate the effects of these appointments. Our findings indicate that hiring board executives with prior government experience increases both goodwill and profitability for companies.
Finally, we investigate the mechanisms behind these effects, focusing on regulatory complexity. We argue that the value of revolving door directors goes beyond policy expertise. Their insider knowledge includes understanding how to work though complex regulatory environments, making them especially valuable in industries characterised by uncertainty and technical regulations.
