Capturing the regulatory rule‐making process : How historical antecedents of US regulatory agencies impact industry conditions

Purpose – The purpose of this study is to integrate institutional theory with current research in corporate political strategy and political science to examine the relationship between organizations and regulatory agencies. It seeks to explore the limits of the power of the state to regulate organizations by comparing the historical timing of industry regulation of two different fields. It aims to examine two US regulatory agencies – the National Highway Traffic Safety Administration (NHTSA) and the Federal Aviation Administration (FAA). Design/methodology/approach – The paper presents a longitudinal analysis of two US regulatory agencies that illustrates differences in agency responses to firm resistance. Specifically, event history analysis and maximum likelihood estimation are used to examine the impact that firms in the commercial airline and automobile industry have in the rule‐making process of the FAA and NHTSA. Findings – Distinct differences were found between the rule‐making context of the airline and automobile industries. Research limitations/implications – The study focuses on the rule‐making context of two regulatory agencies. Examining additional agencies in future studies would help confirm the results of this study. Moreover, because the study is limited to regulatory agencies in the USA, the results may not be directly generalizable to other nations. Originality/value – This study emphasizes the importance of historical context and its impact on current industry conditions, particularly in regulation.