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Lobbying Activities of Multinational Firms

  • Andreas Polk

This paper investigates if multinationals in.uence the political process through lobbying more effectively than national firms. First, I introduce a model which contrasts a multinational’s incentives for lobbying with those of a national firm. Then the effect of lobbying on the political decision is analyzed. I conclude that multinationals have smaller incentives to lobby because they have smaller stakes in national markets. But the effectiveness of lobbying by multinationals might be higher if the government cares much about production in the home country. The resulting regulation depends on the relative strength of these effects.

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File URL: http://www.soi.uzh.ch/research/wp/2002/wp0205.pdf
File Function: Revised version, 2002
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Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0205.

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Length: 32 pages
Date of creation: Jun 2002
Date of revision: Jun 2002
Handle: RePEc:soz:wpaper:0205
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  1. Ellingsen, T. & Wärneryd, K.E., 1993. "Foreign direct investment and the political economy of protection," Discussion Paper 1993-8, Tilburg University, Center for Economic Research.
  2. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  3. Olarreaga, Marcelo, 1999. "Foreign-owned capital and endogenous tariffs," Policy Research Working Paper Series 2205, The World Bank.
  4. Bhagwati, Jagdish N & Dinopoulos, Elias & Wong, Kar-yiu, 1992. "Quid Pro Quo Foreign Investment," American Economic Review, American Economic Association, vol. 82(2), pages 186-90, May.
  5. Hillman, Arye L & Ursprung, Heinrich W, 1993. "Multinational Firms, Political Competition, and International Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 347-63, May.
  6. Blonigen, Bruce A. & Ohno, Yuka, 1998. "Endogenous protection, foreign direct investment and protection-building trade," Journal of International Economics, Elsevier, vol. 46(2), pages 205-227, December.
  7. Armin Schmutzler, 1998. "Environmental Regulations and Managerial Myopia," SOI - Working Papers 9903, Socioeconomic Institute - University of Zurich.
  8. Lawrence H. Summers, 1999. "Distinguished Lecture on Economics in Government: Reflections on Managing Global Integration," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 3-18, Spring.
  9. Andreas Polk, 2002. "How Special Interests Shape Policy - A Survey," SOI - Working Papers 0206, Socioeconomic Institute - University of Zurich, revised Jul 2002.
  10. Rauscher, Michael, 1994. "Environmental Regulation and the Location of Polluting Industries," CEPR Discussion Papers 1032, C.E.P.R. Discussion Papers.
  11. Bhagwati, Jagdish N. & Brecher, Richard A. & Dinopoulos, Elias & Srinivasan, T. N., 1987. "Quid pro quo foreign investment and welfare : A political-economy-theoretic model," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 127-138, October.
  12. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer, vol. 2(2), pages 229-244, August.
  13. Konishi, Hideo & Saggi, Kamal & Weber, Shlomo, 1999. "Endogenous trade policy under foreign direct investment," Journal of International Economics, Elsevier, vol. 49(2), pages 289-308, December.
  14. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
  15. Eckhard Janeba, 2000. "Tax Competition When Governments Lack Commitment: Excess Capacity as a Countervailing Threat," American Economic Review, American Economic Association, vol. 90(5), pages 1508-1519, December.
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