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Political Cleavages within Industry: Firm-level Lobbying for Trade Liberalization

The American political science review, 2017-02, Vol.111 (1), p.1-20 [Peer Reviewed Journal]

Copyright © American Political Science Association 2017 ;American Political Science Association 2017 ;ISSN: 0003-0554 ;EISSN: 1537-5943 ;DOI: 10.1017/S0003055416000654 ;CODEN: APORBP

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  • Title:
    Political Cleavages within Industry: Firm-level Lobbying for Trade Liberalization
  • Author: KIM, IN SONG
  • Subjects: Collective action ; Consumers ; Differentiation ; Economics ; Free trade ; Industrial policy ; International trade ; Lobbying ; Markets ; Political economy ; Politics ; Product differentiation ; Tariffs ; Trade liberalization ; Trade policy
  • Is Part Of: The American political science review, 2017-02, Vol.111 (1), p.1-20
  • Description: Existing political economy models explain the politics of trade policy using inter-industry differences. However, this article finds that much of the variation in U.S. applied tariff rates in fact arises within industry. I offer a theory of trade liberalization that explains how product differentiation in economic markets leads to firm-level lobbying in political markets. High levels of product differentiation eliminates the collective action problem faced by exporting firms while import-competing firms need not fear product substitution. To test this argument, I construct a new dataset on lobbying by all publicly traded manufacturing firms from reports filed under the Lobbying Disclosure Act of 1995. I find that productive exporting firms are more likely to lobby to reduce tariffs, especially when their products are sufficiently differentiated. I also find that highly differentiated products have lower tariff rates. The results challenge the common focus on industry-level lobbying for protection.
  • Publisher: New York, USA: Cambridge University Press
  • Language: English
  • Identifier: ISSN: 0003-0554
    EISSN: 1537-5943
    DOI: 10.1017/S0003055416000654
    CODEN: APORBP
  • Source: ProQuest Central
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