Resumo

One of the reasons firms seek to establish political influences is due to the importance of public policies and their effects on the competitive environment of organizations (Hillman & Hitt, 1999). Firms, by pursuing incentives for innovation through political actions, could give rise to a substitute effect, represented by the decrease of firm investments in innovation, or to a complementary effect, reducing uncertainty and contributing to a more favorable environment for firm investments in innovations (Ozer & Markóczy, 2010).

Research problem: How does individual and collective corporate political action impact on firm investments in research and development? The overall objective of the study was to test for the complementary effect between corporate political decisions and R&D investments. We investigated such decisions considering the possibility of firms performing political actions individually and/or collectively; the emergence of collective action problem; and the uncertainty of political markets.

Little attention has been given to the joint analysis of technological innovation and corporate political actions (Taylor, 1997; Ozer and Markóczy 2010; Holmes et al., 2016). Mixed results have been observed regarding the effects between these two types of investment (Lai, 2020; Chu & Hoang, 2020). We adopted an institutional approach to the phenomenon of political actions and innovation (Ostrom & Walker, 1997; Holmes et. al, 2016), which allowed the discussion of issues such as the problem of collective action, transaction costs, and decisions under uncertainty.

In this quasi-experiment, we combined business game simulation and linear experiments with public goods along with modeled market and nonmarket scenarios, which permitted the investigation of participant decisions under transaction costs. We conducted panel data with fixed effect regressions analysis (and instrumental variables) using data from 72 students' decisions and 575 observations. The proposed models included corporate political and R&D investment decisions, and two variables were used as control variables: gross sales revenues and free cash flow.

We examined how corporate political action interferes with a firm’s R&D investment decision. There was a positive and significant relationship between: a) individual political investments and R&D investments; and b) collective political action and R&D investments, in the two main panel data models. We found that, in an oligopoly competition under collective action problems and moderated uncertainty, individual and collective political investment decisions are complementary to R&D investments.

Even though there was information asymmetry, limited communication among firms, and the possibility of free-riders, data revealed the presence of complementary effect. Complementary effects suggest a more complex institutional scenario in which firms' political actions towards innovation can have positive effects, allowing economic growth and innovation.

Hansen, W. L., Mitchell, N. J., & Drope, J. M. (2005). The logic of private and collective action. American Journal of Political Science. Hillman, A. J., & Hitt, M. A. (1999). Corporate Political Strategy Formulation: A Model of Approach, Participation and Strategic Decisions. Academy of Management Review, 24(4), 825–842. Ozer, M., & Markóczy, L. (2010). Complementary or alternative? The effects of corporate political strategy on innovation. Journal of Strategy and Management, 3, 252–272.