Policy Learning in Nascent Industries’ Venue Shifting: A Study of the U.S. Small Unmanned Aircraft Systems (UAS) Industry

Industry groups engage in venue shifting when they seek to overturn or alter restrictive regulations imposed by one political venue through another. A critical step in this process is resolving uncertainties surrounding the preference of the targeted venue and the nature of the relevant policy proposal. While existing studies emphasize a long-term trial-and-error process of policy learning, we focus on nascent industries and argue that ventures seek other information sources to resolve these uncertainties quickly. In particular, nascent industry groups are likely to perceive that the targeted venue will support their policy proposal if the targeted venue is ideologically distant from the venue that has enacted the restrictive regulations, if the targeted venue has recently supported other nascent industry groups’ similar policy proposals, or if the industry groups themselves are more exposed to industry peers’ success in promoting the same policy proposal in other jurisdictions. Under these conditions, the industry groups invest more to influence the targeted venue in response to restrictive regulations enacted by other venues. We find support for our theory by examining how from 2013 to 2019 the small unmanned aircraft systems industry trade associations in the United States lobbied state governments to nullify local regulations.