Firms dealing with regulatory change: innovation and political influence strategies

Abstract

Firm-level strategies, particularly political strategies, are overlooked in transition studies. Therefore, we study how car manufacturers combine and change their innovation and political influence strategies in response to a technology-forcing regulation that attempts to drive transition. We use Oliver and Holzinger?s (2008) conceptual framework on the case of the zero emission vehicle mandate over the period 1990-2013. We use patent and sales data to operationalize the R&D and commercialization aspects of innovation strategies, while using corporate political activities data to operationalize political influence strategies. We find that firstly, car manufacturers use specific combinations of innovation and political influence strategies, along their value maintaining or creating nature. Secondly, these manufacturers change their strategies and become more value creating over time, which supports socio-technical transition processes. Thirdly, we refine Oliver and Holzinger?s (2008) strategy typology by identifying subclasses in defensive (opposition and slowdown) and proactive strategies (shaping, support and progressive).