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  3. American Economic Journal: Economic Policy
  4. November 2014
  5. The Dynamics of Firm Lobbying

The Dynamics of Firm Lobbying

  • William R. Kerr
  • William F. Lincoln
  • Prachi Mishra
American Economic Journal: Economic Policy
vol. 6, no. 4, November 2014
(pp. 343-79)
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Abstract

How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confirmed in studying how firms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its influence on firm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made.

Citation

Kerr, William R., William F. Lincoln, and Prachi Mishra. 2014. "The Dynamics of Firm Lobbying." American Economic Journal: Economic Policy, 6 (4): 343-79. DOI: 10.1257/pol.6.4.343

Additional Materials

JEL Classification

  • D22 Firm Behavior: Empirical Analysis
  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • D78 Positive Analysis of Policy Formulation and Implementation
  • L21 Business Objectives of the Firm
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