Public Interests of Private Corporations

Over centuries, firms have multiplied apace and attained significant embeddedness within political systems around the world. Why, however, do some firms focus on lobbying the government to facilitate market access, while others prioritize social issue areas? This paper advances a general theory of corporate responsiveness which posits that firms’ growth in scale induces political sensitivity to social pressures. As firms’ pursuit of market leadership necessitates the cultivation of internal and external coalitions of support, lobbying serves as a signal of commitment to addressing distributional conflicts at both intra-firm and society-wide levels. This theory is tested with a new 1999-2019 panel dataset of Fortune 500 firms matched with over 100,000 disclosure reports along with an extensive range of political and economic controls. Estimates show that corporate growth in scale is robustly associated with greater lobbying on workforce-oriented areas such as labor and immigration, relative to trade policy, while the association is weaker for society-oriented areas such as civil rights and education. These findings illuminate how firms’ role in mitigating domestic backlash sustains momentum toward global economic integration.