Blurring the Lines: A Quantitative Study of the Dynamic Interplay between Lobbying and Corporate Social Responsibility in European Firms

Firms are increasingly involved in political activities around social issues (Peterson & Pfitzer 2009). These activities suggest a certain degree of interaction between lobbying, or in other words Corporate Political Activities (CPA), and Corporate Social Responsibility (CSR), evoking questions of whether there is a trade-off between pursuing CSR and CPA. Explanations have far-reaching consequences for the scope of CSR and CPA practices, and bear political and social implications. Understanding the role of corporations in society is especially important in the new area of governance modes beyond the state. This understanding can lead to an increased level of accountability and transparency (Bernhagen & Patsiurko 2014: 1-2). While a growing number of studies have started to explore the link between CPA and CSR (Bernhagen & Patsiurko 2014; den Hond, Rehbein, Bakker & Lankveld 2014; Mellahi, Frynas, Sun & Siegel 2016), no research has explained their interaction in a comprehensive manner. This research aims to fill this gap by systematically analysing the dynamic interplay between CPA and CSR. These insights lead to the following research question: "When, how, to what extent, and with what effect is there a dynamic interplay between CSR issues and CPA activities?"

I focus on heterogeneous institutional- and societal pressures as explanatory determinants of the dynamic interplay between CSR and CPA. This choice is informed by the fact that globalization, and the expansion of firms' operations to multiple countries, creates certain levels of complexity in which firms face multiple, heterogeneous and sometimes conflicting expectations (Scherer, Palazzo & Seidl 2013: 265, 278; see also Child and Rodrigues 2011; Smith and Lewis 2011; Ioannou & Serafeim 2012). Though these forces only compel companies to 'do something' in general terms (Mellahi et al., 2016: 153-154), I argue that companies will opt to act politically in response to them, even though acting politically is a long-term process which entails a lot of effort (Peterson & Pfitzer 2009: 49). Institutional and societal pressures stress supporting public goods, which can lead to collective action problems, like free-riding (Lawton, McGuire & Rajwani 2013: 8; see also Olson 2009). Acting politically ensures that competitors are forced into responsible behaviour as well, changing the level of the playing field and overcoming collective action problems (Olson 2009: 135-153).

Though both explanatory determinants are external drivers that constrain or enable the interplay between CSR and CPA, institutional pressure reflects a contextual perspective while societal pressure reflects a relational perspective. Institutional pressure is informed by institutional theories (Mellahi et al. 2016: 153-154) and entails economic growth, economic uncertainty, regulatory pressure, political competition and ideology, and environmental heterogeneity (den Hond et al. 2014: 809; Hillman, Keim & Schuler 2004: 843-844; Lux, Crook, & Woehr 2011: 234). Societal pressure, on the other hand, is informed by stakeholder theories (Mellahi et al. 2016: 153-154) and entails public scrutiny/media pressure (Chalmers & van den Broek 2016), stakeholder-groups activism (den Hond & de Bakker 2007) and (local) community pressure (Marquis, Glynn, & Davis 2007). Other potential explanatory factors that will be included and controlled for in this research, are: firm-level variables, industry-level variables, and home-country characteristics (Bernhagen & Patsiurko 2014: 4-8; Favotto, Kollman and Bernhagen 2016: 13-16).