Proceedings of The 7th International Conference on Business, Management and Economics
Year: 2022
DOI: https://www.doi.org/10.33422/7th.icbmeconf.2022.12.100
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The Relationship between the Density of Fortune 500 Companies within a State and Their Political Donation in the Elections of Senators
Kuo-Liang Chen, Hsin-Ju Stephie Tsai, Pei Ru You
ABSTRACT:
Along with the growing interest in nonmarket strategy, more attention has been paid to companies’ strategy in social and political dimensions. However, comparing to social strategy, the literature of companies’ political strategy has fallen behind the literature of companies’ social strategy. This study aims to explore the special context in the US senators’ election, where each state elects two seats of senators regardless the size of population within the given state. Under this election format, senators need fewer votes in less populated states than those senators in states with more population. In order words, business located in different states may carry different levels and influences of political resources that the local candidates need. By incorporating with bargaining power theory, we suggest companies’ and political candidates’ bargaining power may vary across different stages of election cycle. Specifically, business’s bargaining power may be higher before the election cycle. However, it drops significantly after the politician winning the election. Furthermore, it increases again when the next election cycle is approaching. Besides, candidate’s congressional leadership overlapping with the company’s interests and incumbent status will make the politician a competitive candidate to positively moderate the differences of companies’ political donation. This study suggest that business may utilize nonmarket strategy to maximize its influence on the political arena in order to secure and facilitate a better competition environment.
keywords: Nonmarket strategy, Political donation, US Senator, Bargaining Power