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Lobbying Behind the Frontier

Author

Listed:
  • Matilde Bombardini
  • Olimpia Cutinelli Rendina
  • Francesco Trebbi

Abstract

This chapter investigates the non-market response of firms to international trade shocks increasing the level of competition in U.S. industries. Lobbying expenditures increase as a consequence of import changes related to the China shock. The effect on lobbying is not homogeneous across firms and it concentrates particularly in those producers which are behind the technological frontier. We discuss theoretical mechanisms driving lobbying of firms away from the technological frontier: not only the cost-benefit trade-off between innovation and lobbying is relatively less appealing for low productivity firms, but the collective action ability of low productivity firms improves after a competitive shock.

Suggested Citation

  • Matilde Bombardini & Olimpia Cutinelli Rendina & Francesco Trebbi, 2021. "Lobbying Behind the Frontier," NBER Working Papers 29120, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29120
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    Cited by:

    1. Salomé Baslandze, 2021. "Barriers to Creative Destruction: Large Firms and Nonproductive Strategies," FRB Atlanta Working Paper 2021-23, Federal Reserve Bank of Atlanta.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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