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When Microsoft was founded, the company devoted very few resources to lobbying activities. Aftera high-profile antitrust case against it, however, the company began to lobby heavily. Why does it makefinancial sense for companies to invest in lobbyists?
Firms and corporations always need support of legislation which would help them in havingsupportive and comfortable business environment. Now some firms like M face legal andlegislative problems and then after that they start investing in lobbyists because this financiallybeneficial for them to have rules and regulations which are in favor of their growth and they willgain much more than the money that they have invested in lobbyists.
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Chapter 18
Public Economy
Introduction
Markets and Welfare
The Economics of the Public Sector
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small firms typically do not engage in lobbying because the cost of lobbying right is going to be greater than the actual gains that they get from lobbying. In other words, it costs so much to lobby that the small revenue they would get from favorable regulation maybe just isn't worth it. But for a large corporation, it may cost them the exact same amount toe lobby. But the gains air so much larger because it would affect their business much more right? If if Microsoft was only selling maybe one or two computers as a small business versus selling billions of computers as a large multinational conglomerate, what can we expect? We can expect them to engage in more lobbying as their business grew because the gains from lobbying grew with the size of their business.
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