Why firms lobby more alone than collectively: a systematic test across three countries

In many political systems, firms increasingly rely on lobbying alone as compared to collective lobbying via business associations. Various explanations have been proposed to understand why firms choose to lobby individually, but they are rarely tested systematically. Therefore, we identify from the literature five factors that may explain firms’ relative reliance on lobbying alone and test them systematically. These factors affect the extent to which (1) firms have the incentive and ability to supply individual lobbying or (2) policymakers demand input from individual firms. We test these explanations by analysing survey data on large companies in Denmark, Finland, and the Netherlands. We find that the scope of firms’ political objectives is the primary factor: when firms seek mostly private benefits, they tend to favour lobbying alone. Furthermore, firms’ access to policymaking matters, as firms with insider status and those operating in the Netherlands (where corporatism is weaker) lobby more alone. We also find some evidence that political disagreements within industries increase firms’ tendency to lobby alone. These findings imply that firms lobby more alone when their political objectives are so narrow that collective action becomes futile. Moreover, the extent that policymakers demand input from firms also matters.