Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307785 
Year of Publication: 
2023
Series/Report no.: 
Helsinki GSE Discussion Papers No. 4
Publisher: 
Helsinki Graduate School of Economics, Helsinki
Abstract: 
Lobbyists are nowadays increasingly involved in promoting businesses through societal investment, producing what has been paraphrased as "corporate beauty contests" due to the uncertain winning criteria. To understand what motivates firm participation in these contests and their effects on welfare, our paper analyzes lobbying contests in which firms can boost their competitiveness in a market for political favors through either monetary contributions or societal investments. We establish that the responsiveness of political favors to social lobbying (i) alleviates lobbying competition, (ii) decreases total lobby spending, and (iii) shifts spending from monetary to social lobbying. This is generally welfare improving. Our results thus suggest that the ongoing transition to societal lobbying is a move toward a more efficient lobbying standard.
Subjects: 
Lobbying contest
Corporate social responsibility
Beauty contest
Multidimensional expenditure
Differentiation
Endogenous competitiveness
Obfuscation
JEL: 
D43
D83
ISBN: 
978-952-7543-03-0
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.