New Working Paper: Innovate to Lobby? European Firms and Corporate Lobbying during Climate Change Regulation

We are excited that our working paper “Innovate to Lobby? European Firms and Corporate Lobbying during Climate Change Regulation” is online and was nominated for the SMS Responsible Research Award.

The full paper can be found here: SSRN. Further information are available on the research page.

Paper abstract: Which firms are more likely to lobby regulators about green policy: those producing more or fewer green innovations? The answer is not obvious. On one hand, highly green-innovative firms may prefer to concentrate on innovation, since their internal technological capabilities reduce their need for outside information. On the other hand, the innovativeness of their technologies gives them reason to seek regulatory access: to learn how policy will evolve and to position their innovations for commercial success. We argue that the answer turns on a second dimension: a firm’s exposure to climate regulation. Because exposure raises the value of regulatory information most for firms able to act on it, green innovativeness and climate exposure should be complements, with access concentrated among firms high on both. We examine this in the context of the European Union’s 2019 European Green Deal (EGD), which sharply increased regulatory uncertainty. Using data on 2,038 publicly listed European firms over 2015-2023, we combine EU lobbying meeting disclosures with firm-level green-patent and carbon-intensity measures. Exploiting the unexpected elevation of climate policy in 2019, we show that green lobbying rose sharply afterward, driven primarily by firms that are both highly green-innovative and highly carbon-intensive: consistent with the two dimensions operating as complements rather than as independent motives. Our findings show that green innovation and lobbying rise jointly under regulatory change, advancing research on non-market strategy and corporate innovation.