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Resistance to Trade Liberalization in Unionized Sector

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  • Koichi Kagitani

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    Abstract

    This paper studies the lobbying against trade liberalization by both a firm and a union in the same industry. We find that the relationship between their political activities depends on the effect of political activity by one on the marginal effectiveness of political activity by the other. We also show that, when they are strongly risk-averse and their political activities are strategic complements, trade liberalization is likely to be successful if business is brisk, the foreign firm's production cost is high or the number of union members is small. However, when they are not strongly risk-averse, these results hold reversely. Copyright Kluwer Academic Publishers 2003

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    File URL: http://hdl.handle.net/10.1023/A:1025316911337
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    Bibliographic Info

    Article provided by Springer in its journal Open Economies Review.

    Volume (Year): 14 (2003)
    Issue (Month): 4 (October)
    Pages: 419-435

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    Handle: RePEc:kap:openec:v:14:y:2003:i:4:p:419-435

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    Web page: http://www.springerlink.com/link.asp?id=100323

    Related research

    Keywords: lobbying; trade liberalization; labor union;

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    1. Takacs, Wendy E, 1981. "Pressures for Protectionism: An Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 19(4), pages 687-93, October.
    2. Laixun Zhao, 1996. "The Complementarity Between Endogenous Protection And Direct Foreign Investment," Economics and Politics, Wiley Blackwell, vol. 8(1), pages 61-72, 03.
    3. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-85, December.
    4. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589826, November.
    5. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-87, December.
    6. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244 National Bureau of Economic Research, Inc.
    7. Mezzetti, Claudio & Dinopoulos, Elias, 1991. "Domestic unionization and import competition," Journal of International Economics, Elsevier, vol. 31(1-2), pages 79-100, August.
    8. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
    9. Brander, James A. & Spencer, Barbara J., 1988. "Unionized oligopoly and international trade policy," Journal of International Economics, Elsevier, vol. 24(3-4), pages 217-234, May.
    10. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589819, November.
    11. Kar-yiu Wong, 1989. "Optimal Threat Of Trade Restriction And Quid Pro Quo Foreign Investment," Economics and Politics, Wiley Blackwell, vol. 1(3), pages 277-300, November.
    12. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
    13. Pecorino, Paul, 1998. "Is There a Free-Rider Problem in Lobbying? Endogenous Tariffs, Trigger Strategies, and the Number of Firms," American Economic Review, American Economic Association, vol. 88(3), pages 652-60, June.
    14. Elias Dinopoulos, 1992. "Quid Pro Quo Foreign Investment And Vers: A Nash Bargaining Approach," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 43-60, 03.
    15. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589833, November.
    16. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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