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Voting for Protection: Does Direct Foreign Investment Influence Legislator Behavior?

In: Foreign Direct Investment


  • Bruce A. Blonigen
  • David N. Figlio


The political economy of trade protection has long been of interest to economists and policy makers. The idea that levels of protection may be endogenous with trade flows has been a particularly important issue in the literature. In general, the endogenous protection literature postulates that import penetration will cause domestic interests to lobby more intensely for protection. Thus, higher levels of import penetration lead to increased protection. As a result, a number of papers (see, for example, Arye L. Hillman, 1982; Wolfgang Mayer, 1984; Robert E. Baldwin, 1985; Stephen P. Magee et al., 1989; Ronald D. Fischer, 1992) have established that foreign firms will import less under a regime of endogenous protection than one where the level of protection is exogenous to trade flows. On the empirical side, Daniel Trefler (1993) finds that ignoring the endogeneity of trade and protection understates the impact of U.S. protection on imports by a magnitude of ten…

Suggested Citation

  • Bruce A. Blonigen & David N. Figlio, 2019. "Voting for Protection: Does Direct Foreign Investment Influence Legislator Behavior?," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 13, pages 447-471, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789813277014_0013

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    Foreign Direct Investment; Multinational Enterprises; Mergers and Acquisitions; Greenfield; Trade Policy; Taxation; Spillovers; Offshoring; Wage Inequality; Firm-Specific Assets; Antidumping; Tariff-jumping; Industrial Organization; Ownership-Location-Internalization Theory;
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    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F6 - International Economics - - Economic Impacts of Globalization


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