Protectionist Lobbying and Strategic Investment
AbstractWhy are some uncompetitive industry sectors so effective in lobbying for greater protection and support? This paper attempts to explain the lobbying success of these industries in terms of the strategic role of investment in technology as a credible commitment device. By eschewing potentially profitable investment opportunities firms credibly signal to the government that the cost of a tariff reduction will be substantial. This enables the firms to lobby more effectively for policy concessions Political considerations may therefore provide a significant incentive for firms to reject investment in newer technologies, even when these lower production costs.
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Bibliographic InfoPaper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2002-36.
Length: 35 pages
Date of creation: Nov 2002
Date of revision:
Tariffs; Investment; Lobbying;
Find related papers by JEL classification:
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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- Damania, R., 2001. "When the Weak Win: The Role of Investment in Environmental Lobbying," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 1-22, July.
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