Innovation, Technological Position, and Lobbying: Evidence from US Pharmaceutical Industry

In this paper, applying institutional perspective, I suggest firm innovation is positively related to the firm's involvement in CPA. Institutions are not only the system to prevent uncertainty, but also the structure decided by the bargaining power of actors while reflecting the interests of actors. Innovation changes interest and power, therefore it may offer the incentive and possibility for firms to do institutional work ¨C CPA in my study, to change institutions - public policies in the study. On the other hand, changing to new institutions would imply dropping the interest in old institutions. So the greater the vested interest of the firm in old institutions, the less likely it will be involved in CPA after innovation. Thus, I also hypothesize that firm's centrality in the technology network will negatively moderate the relationship between firm's innovation and involvement in political activities. The hypotheses are tested using US pharmaceutical industry data. Results are mainly consistent with th...