The logic of regulatory venue shopping: A firm’s perspective

Date01 July 2021
Published date01 July 2021
Subject MatterSpecial Issue Articles
Special Issue: Agencies
The logic of regulatory
venue shopping: A firm’s
David Coen
University College London, London, UK
Mattia Guidi
Scuola Normale Superiore, Florence, Italy
Nikoleta Yordanova
University of Mannheim, Mannheim, Germany
Adrienne He
European University Institute, Florence, Italy
Drawing on an original and unique survey data set of 243 medium- and big-sized firms
operating in five sectors (energy, telecommunications, railways, airlines and postal ser-
vices) and across 29 European countries, we analyse what incentivizes firms to interact
with and influence multiple regulators. In so doing, we map the regulatory oppor tunity
structure and scrutinize firms’ venue shopping logics. The study shows that firms can
clearly identify where the locus of political and regulatory competence lies and that they
concentrate their activities at this level. In particular, the data show that the national
level is still the most important target level for regulatory representation. Regulatory
venue shopping, the study illustrates, occurs when issues are highly salient, highly tech-
nical and when high stakes are involved. Notably, we show that firms tend to address
more regulators in sectors characterized by higher international competitiveness
to mitigate uncertainty when operating in multiple markets and facing rivalry from
international competitors.
Agencies, business-government relations, regulation, venue shopping
Public Policy and Administration
2021, Vol. 36(3) 323–342
!The Author(s) 2018
Article reuse guidelines:
DOI: 10.1177/0952076718814900
Corresponding author:
Mattia Guidi, Scuola Normale Superiore, Piazza degli Strozzi, Florence 50123, Italy.
Over recent decades, many regulatory agencies have been created in order to facili-
tate the integration of markets across national borders and correct market failures.
A large body of literature analyses the emergence, institutional design and func-
tioning of these independent regulatory authorities (Gilardi, 2008; Guardiancich
and Guidi, 2016; Jordana and Levi-Faur, 2004; Levi-Faur, 2005). How f‌irms navi-
gate this new complex landscape of regulatory agencies or what logic drives their
activity remains unclear despite its potential implications for regulatory decisions
and outcomes. Which level (national, supranational) prevails? Do f‌irms normally
address multiple regulators? Which sectoral, f‌irm-specif‌ic, or issue-specif‌ic factors
lead them to diversify regulatory venues? Answering these questions is important to
learn how f‌irms use the current regulatory landscape, if this is consistent and useful
to them, and if there are risks of an opportunistic use of this variety of venues: Do
f‌irm choose regulators depending on the kind of outcome they expect? Do they play
regulators against each other?
Given multiple regulators, and the often cited risk of business venue shopping, it
is surprising how few empirical studies of business regulatory activity or models of
business political logics exist. In this article, we explore why f‌irms interact with
specif‌ic regulators drawing on the theories of venue shopping and regulatory gov-
ernance. More specif‌ically, we map the regulatory opportunity structure available
to business by assessing the multiple levels at which business operates and scrutin-
ize f‌irms’ motives to interact with particular regulators. For the purpose, we build
on and add to the broader theoretical literature on venue shopping by applying it
to study f‌irms’ choices of regulators in a multi-level regulatory setting. Indeed,
venue shopping has so far been generally conceptualized as an activity linked to
policy-making, not to regulation, and most research in the public policy and pol-
itical science literature has focused on venue shopping carried out by interest
groups, lobbyists or NGOs rather than individual businesses (Binderkrantz et al.,
2015; Buf‌fardi et al., 2015; Halpin and Fraussen, 2017; Jourdain et al., 2017).
To assess this, we build a regulatory venue shopping model based on the per-
ceived economic and political costs and benef‌its of regulatory interaction. We
assume that f‌irms are strategic political actors and economic maximizers with
incomplete information on regulators’ preferences and the outcomes of potential
regulatory decisions, playing multiple horizontal (sectoral and cross-sectoral regu-
lators) and vertical (national, European and international) venues to obtain the
best outcome. Subsequently, we hypothesize that f‌irms’ activity, or their venue
shopping behaviour, is driven by the technical complexity, the saliency and the
expected economic costs of regulatory decisions. We test our hypotheses using
original survey data on 243 big- and medium-sized f‌irms in f‌ive sectors (energy,
telecom, railway, postal services and airlines) across 29 European countries. By
focussing on network f‌irms, we can study sectors in which regulatory decisions and
interactions are regular and frequent, and, therefore, in which regulatory venue
shopping is most likely to occur. Our results indicate that uncertainty is the main
324 Public Policy and Administration 36(3)

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