Why companies cooperate with governments. An analysis of the governance decisions of oil companies 1950 to 2000

The paper will study what market incentives motivate energy companies to accept a larger role of public actors in regulating their market and/or provide costly public goods on their own. Private public governance research frequently posits societal, e.g. transnational, pressure as a necessary condition for public good provision by private firms. Less research, however, has looked into the possibilities of private public governance when social pressure is absent. The paper aims to amend this gap by analysing the company reports of BP and Shell - including their predecessor companies - throughout the 2nd half of the 20th century. In this, it will test the hypotheses that a positive position to public governance primarily results from a company's declining market position. The paper will also argue that an entrepreneurial role understanding of leading managers is an important intervening factor. Despite its obvious limitations, the BP and Shell sample is a good fit for such a study since it controls for the crucial factor of home state socialisation and management culture, with both companies having at least strong roots in the UK. Both companies also offer a complete time series of company reports for analysis. Concerning policy, results of the paper can inform societal attempts to change the business model of oil companies that are less sensitive to or even immune from public pressure like private equity firms or National Oil Companies.