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The Dynamics of Firm Lobbying

  • William R. Kerr

    ()

  • William F. Lincoln

    ()

  • Prachi Mishra

    ()

How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by fi rms. Estimating a binary choice model of firm behavior, we fi nd signifi cant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confi rmed in studying how fi rms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its in‡fluence on fi rm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made.

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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp1072.

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Date of creation: 01 Jan 2014
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Handle: RePEc:wdi:papers:2014-1072
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