Master Thesis Strategic Management 2017/2018 Lobbying and its Implications on Organizational Performance. A study in the European agricultural sector

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This study aims to make sense of the inconclusive outcomes concerning the relation between lobbying and organizational performance. Yet, the existing literature is dominated by a focus on the American institutional context. By applying an exclusive focus on the European context, this study adds to this gap in the literature. Besides, this study focusses on the agricultural sector, as it is heavily being influenced by lobbyists, draining 38% of the entire European budget. In order to elicit the relationship between lobbying and performance, several hypotheses are composed which are based on three theoretical lenses: the social exchange theory, transaction cost theory and agency theory. These hypotheses will be tested with a multiple regression analysis. Until recently, homogenous datasets of firms’ lobbying activities have been scarce and unreliable, leading to research which was mainly based on textual analysis. Now, thanks to the founding and evolution of the European transparency register, quantitative data on lobbying has become publicly available. This register serves as main source to gather data, together with Orbis. Yet, the findings of this study are mixed. In general, the return to lobbying does not seem to be statistically different from zero. The amount of hours that is used to lobby, does display a statistically significant negative relationship with organizational performance however. In order to get better insight into this relationship, future research will be necessary. This is, amongst others, due to the limitations of this study. This study has neglected to take a broad time horizon into account, only focusing on the year 2017. Moreover, it has only focused on in-house lobbyists. Besides, the operationalization of organizational performance does not cover the entire load and the dataset from the transparency register is subject to some pitfalls. Still, this study is useful for managers in a sense that they should take a closer look at the agency costs associated with lobbying. It may be worthwhile to spend more attention to the remuneration of lobbyists. Keywords: Lobbying, Transaction cost, Agency costs, Social exchange, Organizational Performance, Transparency register, Agricultural sector
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