Effects of Earnings Pressure on Corporate Lobbying Strategy: An Attention-Based Perspective on the Biopharmaceutical Industry

Although research has documented antecedents of corporate lobbying found within the boundaries of firms, the effects of external stakeholders on lobbying strategies have been underexplored. In this study, we investigate how security analysts in the financial market affect firms’ lobbying activities by pressuring firms to achieve greater earnings. Specifically, we predict that heightened earnings pressure would decrease firms’ lobbying intensity and that this relationship would be weakened when the firms’ attention is oriented toward a longer time horizon. Based on the data of global biopharmaceutical firms, we find general support for our suggestions. These findings provide novel insights on how the financial market decreases firms’ lobbying activity from the perspectives of managerial short-termism and organizational attention.