Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Dynamics of Firm Lobbying

Contents:

Author Info

  • William R. Kerr
  • William F. Lincoln
  • Prachi Mishra

Abstract

We study the determinants of the dynamics of firm lobbying behavior using a panel data set covering 1998-2006. Our data exhibit three striking facts: (i) few firms lobby, (ii) lobbying status is strongly associated with firm size, and (iii) lobbying status is highly persistent over time. Estimating a model of a firm's decision to engage in lobbying, we find significant evidence that up-front costs associated with entering the political process help explain all three facts. We then exploit a natural experiment in the expiration in legislation surrounding the H-1B visa cap for high-skilled immigrant workers to study how these costs affect firms' responses to policy changes. We find that companies primarily adjusted on the intensive margin: the firms that began to lobby for immigration were those who were sensitive to H-1B policy changes and who were already advocating for other issues, rather than firms that became involved in lobbying anew. For a firm already lobbying, the response is determined by the importance of the issue to the firm's business rather than the scale of the firm's prior lobbying efforts. These results support the existence of significant barriers to entry in the lobbying process.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w17577.pdf
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17577.

as in new window
Length:
Date of creation: Nov 2011
Date of revision:
Publication status: published as Kerr, William R., William F. Lincoln, and Prachi Mishra. "The Dynamics of Firm Lobbying." American Economic Journal: Economic Policy (forthcoming).
Handle: RePEc:nbr:nberwo:17577

Note: LE LS PE POL PR
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ben S. Bernanke, 1980. "Irreversibility, Uncertainty, and Cyclical Investment," NBER Working Papers 0502, National Bureau of Economic Research, Inc.
  2. Xavier Gabaix, 2009. "The Granular Origins of Aggregate Fluctuations," NBER Working Papers 15286, National Bureau of Economic Research, Inc.
  3. Lincoln, William F. & McCallum, Andrew H., 2011. "Entry Costs and Increasing Trade," Working Papers, Research Seminar in International Economics, University of Michigan 619, Research Seminar in International Economics, University of Michigan.
  4. Jennifer Hunt & Marjolaine Gauthier-Loiselle, 2008. "How Much Does Immigration Boost Innovation?," Departmental Working Papers, McGill University, Department of Economics 2008-07, McGill University, Department of Economics.
  5. Deniz Igan & Prachi Mishra & Thierry Tressel, 2011. "A Fistful of Dollars: Lobbying and the Financial Crisis," NBER Working Papers 17076, National Bureau of Economic Research, Inc.
  6. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 1(1), pages 179-208, 05.
  7. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2014. "Skilled Immigration and the Employment Structures of U.S. Firms," William Davidson Institute Working Papers Series wp1071, William Davidson Institute at the University of Michigan.
  8. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, Elsevier, vol. 75(2), pages 329-348, July.
  9. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, American Economic Association, vol. 87(4), pages 545-64, September.
  10. Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001. "Market entry costs, producer heterogeneity and export dynamics," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers, Indian Statistical Institute, New Delhi, India 03-10, Indian Statistical Institute, New Delhi, India.
  11. Tripathi Micky & Ansolabehere Stephen & Jr James M. Snyder, 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, De Gruyter, vol. 4(2), pages 1-26, August.
  12. Raymond Fisman, 2001. "Estimating the Value of Political Connections," American Economic Review, American Economic Association, American Economic Association, vol. 91(4), pages 1095-1102, September.
  13. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1135-1155, December.
  14. Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
  15. Hunt, Jennifer, 2010. "Which Immigrants Are Most Innovative and Entrepreneurial: Distinctions by Entry Visa," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7699, C.E.P.R. Discussion Papers.
  16. Takao Kato & Chad Sparber, 2010. "Quotas and Quality: The Effect of H-1B Visa Restrictions on the Pool of Prospective Undergraduate Students from Abroad," CReAM Discussion Paper Series 1010, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  17. George J. Borjas, 2009. "Immigration in High-Skill Labor Markets: The Impact of Foreign Students on the Earnings of Doctorates," NBER Chapters, in: Science and Engineering Careers in the United States: An Analysis of Markets and Employment, pages 131-161 National Bureau of Economic Research, Inc.
  18. Sunil Mithas & Henry C. Lucas, Jr., 2010. "Are Foreign IT Workers Cheaper? U.S. Visa Policies and Compensation of Information Technology Professionals," Management Science, INFORMS, INFORMS, vol. 56(5), pages 745-765, May.
  19. Chellaraj, Gnanaraj & Maskus, Keith E. & Mattoo, Aaditya, 2005. "The contribution of skilled immigration and international graduate students to U.S. innovation," Policy Research Working Paper Series 3588, The World Bank.
  20. Stephen Morris & Stephen Coate, 1999. "Policy Persistence," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1327-1336, December.
  21. Mara Faccio, 2006. "Politically Connected Firms," American Economic Review, American Economic Association, American Economic Association, vol. 96(1), pages 369-386, March.
  22. Mark Stewart, 2006. "Maximum simulated likelihood estimation of random-effects dynamic probit models with autocorrelated errors," Stata Journal, StataCorp LP, StataCorp LP, vol. 6(2), pages 256-272, June.
  23. Madeline Zavodny, 2003. "The H-1B program and its effects on information technology workers," Economic Review, Federal Reserve Bank of Atlanta, Federal Reserve Bank of Atlanta, issue Q3, pages 33-43.
  24. Hajivassiliou, Vassilis & McFadden, Daniel & Ruud, Paul, 1996. "Simulation of multivariate normal rectangle probabilities and their derivatives theoretical and computational results," Journal of Econometrics, Elsevier, Elsevier, vol. 72(1-2), pages 85-134.
  25. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, Econometric Society, vol. 50(3), pages 761-64, May.
  26. Jaewoo Ryoo & Sherwin Rosen, 2004. "The Engineering Labor Market," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(S1), pages S110-S140, February.
  27. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2012. "Revolving Door Lobbyists," American Economic Review, American Economic Association, American Economic Association, vol. 102(7), pages 3731-48, December.
  28. Giovanni Facchini & Anna Maria Mayda & Prachi Mishra, 2009. "Do Interest Groups affect US Immigration Policy?," CReAM Discussion Paper Series 0904, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  29. William R. Kerr & William F. Lincoln, 2010. "The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention," NBER Working Papers 15768, National Bureau of Economic Research, Inc.
  30. Philip Oreopoulos, 2011. "Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 3(4), pages 148-71, November.
  31. ,, 2011. "Discussion summary of "A Fistful of Dollars: Lobbying and the Financial Crisis"," NBER Chapters, in: NBER Macroeconomics Annual 2011, Volume 26, pages 244-246 National Bureau of Economic Research, Inc.
  32. William R. Kerr, 2007. "The Ethnic Composition of US Inventors," Harvard Business School Working Papers 08-006, Harvard Business School.
  33. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 35(1), pages 15-43, April.
  34. George J. Borjas & Kirk B. Doran, 2012. "The Collapse of the Soviet Union and the Productivity of American Mathematicians," NBER Working Papers 17800, National Bureau of Economic Research, Inc.
  35. Luigi Zingales, 2011. "Comment on "A Fistful of Dollars: Lobbying and the Financial Crisis"," NBER Chapters, in: NBER Macroeconomics Annual 2011, Volume 26, pages 236-243 National Bureau of Economic Research, Inc.
  36. Francesco Trebbi & Matilde Bombardini, 2008. "Together or Alone in Lobbying for Trade Policy," 2008 Meeting Papers 458, Society for Economic Dynamics.
  37. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  38. Chen, Hui & Parsley, David & Yang, Ya-wen, 2010. "Corporate Lobbying and Financial Performance," MPRA Paper 21114, University Library of Munich, Germany.
  39. Rodrik, Dani, 1991. "Policy uncertainty and private investment in developing countries," Journal of Development Economics, Elsevier, Elsevier, vol. 36(2), pages 229-242, October.
  40. MARA FACCIO & RONALD W. MASULIS & JOHN J. McCONNELL, 2006. "Political Connections and Corporate Bailouts," Journal of Finance, American Finance Association, American Finance Association, vol. 61(6), pages 2597-2635, December.
  41. William R. Kerr, 2008. "Ethnic Scientific Communities and International Technology Diffusion," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 518-537, August.
  42. Marianne Bertrand & Matilde Bombardini & Francesco Trebbi, 2011. "Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process," NBER Working Papers 16765, National Bureau of Economic Research, Inc.
  43. C. Fritz Foley & William R. Kerr, 2011. "Ethnic Innovation and U.S. Multinational Firm Activity," NBER Working Papers 17336, National Bureau of Economic Research, Inc.
  44. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2010. "Revolving Door Lobbyists," CEP Discussion Papers dp0993, Centre for Economic Performance, LSE.
  45. Matilde Bombardini & Francesco Trebbi, 2009. "Competition and Political Organization: Together or Alone in Lobbying for Trade Policy?," NBER Working Papers 14771, National Bureau of Economic Research, Inc.
  46. Dixit, A., 1988. "Entry And Exit Decisions Under Uncertainty," Papers, Princeton, Department of Economics - Financial Research Center 91, Princeton, Department of Economics - Financial Research Center.
  47. Magee, Christopher, 2002. "Endogenous trade policy and lobby formation: an application to the free-rider problem," Journal of International Economics, Elsevier, Elsevier, vol. 57(2), pages 449-471, August.
  48. Devashish Mitra, 1999. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1116-1134, December.
  49. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 47(1), pages 225-38, January.
  50. Marcos Chamon & Ethan Kaplan, 2013. "The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 5(1), pages 1-31, February.
  51. Jeremy C. Stein, 2011. "Comment on "A Fistful of Dollars: Lobbying and the Financial Crisis"," NBER Chapters, in: NBER Macroeconomics Annual 2011, Volume 26, pages 231-235 National Bureau of Economic Research, Inc.
  52. Christina D. Romer & David H. Romer, 2007. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," NBER Working Papers 13264, National Bureau of Economic Research, Inc.
  53. Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, Econometric Society, vol. 62(1), pages 95-116, January.
  54. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, Econometric Society, vol. 67(6), pages 1255-1294, November.
  55. Bronars, Stephen G & Lott, John R, Jr, 1997. "Do Campaign Donations Alter How a Politician Votes? Or, Do Donors Support Candidates Who Value the Same Things That They Do?," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 40(2), pages 317-50, October.
  56. Michael J. Cooper & Huseyin Gulen & Alexei V. Ovtchinnikov, 2010. "Corporate Political Contributions and Stock Returns," Journal of Finance, American Finance Association, American Finance Association, vol. 65(2), pages 687-724, 04.
  57. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  58. Jacob Funk Kirkegaard, 2005. "Outsourcing and Skill Imports: Foreign High-Skilled Workers on H-1B and L-1 Visas in the United States," Working Paper Series, Peterson Institute for International Economics WP05-15, Peterson Institute for International Economics.
  59. Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder Jr, 2003. "Why is There so Little Money in U.S. Politics?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 17(1), pages 105-130, Winter.
  60. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February.
  61. Marilyn Young & Michael Reksulak & William F. Shughart, 2001. "The Political Economy of the IRS," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 13(2), pages 201-220, 07.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. William R. Kerr, 2013. "U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence," NBER Working Papers 19377, National Bureau of Economic Research, Inc.
  2. Jennifer Abel-Koch, 2013. "Endogenous Trade Policy with Heterogeneous Firms," Working Papers 1306, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 01 Aug 2013.
  3. Ian A. Lange & Sarah Polborn, 2012. "Can Lobbying Encourage Abatement? Designing a New Policy Instrument," CESifo Working Paper Series 3760, CESifo Group Munich.
  4. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2013. "Skilled Immigration and the Employment Structures of U.S. Firms," Harvard Business School Working Papers 14-040, Harvard Business School.
  5. Kammerer, Hannes, 2013. "Lobbying for Subsidies with Heterogeneous Firms," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79767, Verein für Socialpolitik / German Economic Association.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17577. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.