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Habitual and Occasional Lobbyers in the U.S. Steel Industry: An EM Algorithm Pooling Approach

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  • Morck, Randall
  • Sepanski, Jungsywan
  • Yeung, Bernard

Abstract

Using U.S. steel firm data, we find that lobbying for import protection appears to be habit-forming. To identify heterogeneity in lobbying behavior among firms, we use an expectation-maximization algorithm to sort our firms into groups with different propensities to lobby and estimate the determinants of lobbying in each group. A two-pool model emerges: occasional lobbyers' lobbying depends on their market performance, and habitual lobbyers' lobbying only depends on past lobbying. The latter tends to be larger steel firms whose business is more focused in steel. Our evidence is consistent with dynamic economies of scale in protection seeking breeding protection-dependent firms. Copyright 2001 by Oxford University Press.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 39 (2001)
Issue (Month): 3 (July)
Pages: 365-78

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Handle: RePEc:oup:ecinqu:v:39:y:2001:i:3:p:365-78

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Cited by:
  1. Blonigen, Bruce A. & Wilson, Wesley W., 2010. "Foreign subsidization and excess capacity," Journal of International Economics, Elsevier, vol. 80(2), pages 200-211, March.
  2. Bruce A. Blonigen, 2004. "Working the System: Firm Learning and the Antidumping Process," NBER Working Papers 10783, National Bureau of Economic Research, Inc.
  3. Y. Hossein Farzin & Jinhua Zhao, 2003. "Pollution Abatement Investment When Firms Lobby Against Environmental Regulation," Working Papers 2003.82, Fondazione Eni Enrico Mattei.

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