The Interactions Between Regulation, Lobbying and Innovation as Elements of Business Strategy in The Energy Sector

Xinyu Li

doi:10.54097/fbem.v5i2.1747

Authors

Xinyu Li

DOI:

https://doi.org/10.54097/fbem.v5i2.1747

Keywords:

Innovation, Corporate strategies, Policy intervention, Regulations, Lobbying, Sustainable development, Firm-level strategies, Political influence strategies, Innovation strategies, Defensive strategies, Proactive strategies, Corporate political activities (CPA).

Abstract

The transition of society to a sustainable society is imperative. Sustainable innovation by energy sector is fundamental to driving the transition. At the same time, a good socio-economic and social legal system is also needed to promote innovation of enterprises. Regulatory intervention is critical to driving companies to sustainable innovation. When corporates are under pressure from environmental regulations, they will be forced to innovate to comply. However, they may also attempt to actively prevent or influence regulations through corporate political activity (CPA), including information strategies, such as lobbying. However, much of the literature focuses only on the impact of regulations on business, and the ability of businesses to influence regulations has been ignored. Due to the lack of this research perspective, we focus on the interaction of each element in this thesis. In this study, I will use an extended literature review to study and analyse the interactions between regulation, lobbying and innovation as elements of business strategy in the energy sector. This study shows that the interplay of policy and innovation is uncertain. Different combinations of regulations have different effects on innovation. All elements develop together over time. This co-development interaction has important implications for sustainable innovation. The business strategy of the energy sector will also change with various conditions. At the same time, business strategy also plays an important role in shaping its market and related policies.

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