Inter-Industry Labor Mobility and Lobbying for Trade Protection

This article investigates how inter-industry labor mobility affects industry lobbying for trade protection when foreign multinationals increase production and sales in the U.S. The level of inter-industry labor mobility is a critical issue to an industry because investment-receiving sectors draw labor from the rest of the economy, thus reducing the supply or increasing the price of labor available to an industry. I hypothesize that sectors employing less sector-specific labor will be more likely to lobby for trade protection when investment-receiving sectors draw labor to expand production, ceteris paribus. An empirical test confirms my hypothesis.     

Endogenous trade policy in general equilibrium: An interaction of redistribution rule,trade openness,and labor market condition

Using a general equilibrium framework, the paper derives trade policy endogenously for a small country. It shows that, contrary to the existing literature, a lobbying industry is not guaranteed trade protection; it may even face trade taxes. Besides lobbying, trade policy depends on other factors such as the trade revenue distribution rule, income distribution across groups, trade openness, factor substitutability in production, industry employment size, and labor market flexibility. The paper also shows that the observed phenomenon of government preference for import tariffs over export subsidies—a long overdue puzzle—is an inherent outcome of lobbying equilibrium. It also shows that trade policies such as import tariffs and export taxes that have the same impact on economic market—Lerner symmetry (1936)—are driven by the same forces in the political market.     

会计准则制定程序研究——基于政治参与者的视角

公司管理层的偏好以及政治参与者的干预使得会计制定程序的公正性和透明性受到公众的质疑。从动态博弈论角度,对会计准则制定过程中不同政治参与者的效用偏好进行建模分析,发现：虽然美国和欧盟的会计准则制定主体遵循极为相似的程序,但由于政治参与者的作用机制不同,会计准则制定的结果也迥然不同。相对美国而言,欧盟会计准则制定者在制定一项新会计准则时,更容易被政治参与者接受。欧盟的会计准则制定过程中有更多的具有独立否定权的政治参与者介入,欧洲的公司比美国的公司更具有游说动机与影响力,政治游说行为在欧盟更容易发生。     

NEOCLASSICAL POLITICAL ECONOMY: AN APPLICATION TO TRADE POLICIES

Abstract. This paper starts with a review of the literature on 'neoclassical'political economy and then goes on to apply this perspective to the issue of trade liberalization. In this connection, the paper critically discusses various political economy models which have been advanced to explain patterns of trade policies in both developed and developing countries and assesses them in light of recent empirical evidence. The paper also makes a brief review of the empirical planning studies which estimate the gains from trade liberalization.     

Leveraging who you know by what you know: Specialization and returns to relational capital

Research Summary: This paper investigates the interaction effects of specialization and relational capital on performance. We distinguish between upstream and downstream relational capital and theorize that higher levels of specialization will buffer against decreases in upstream relational capital, because of deeper domain expertise and stronger downstream relational capital. Conversely, higher levels of generalization permit greater gains from increases in upstream relational capital, due to leverage across a more diversified downstream portfolio of activities. We test and find support for these hypotheses in the context of the US lobbying industry. Our study contributes to the strategic human capital literature by isolating the dimension of specialization and relational capital embodied within individuals and providing performance implications of the interactions. Managerial Summary: Both “what you know” and “whom you know” impacts performance. Generalists and specialists are different on the “what you know” dimension. On the “who you know” dimension, we distinguish between upstream (supplier) and downstream (client) relationships. We show that specialists are buffered by deeper downstream relations from performance declines when their powerful upstream connections lose power. Generalists benefit from broader networks when their upstream connections gain power. Thus, when the value of their relationships change, specialists and generalists should each assess when they can reap performance benefits, and when they need to bolster against adversities. For firms, our study suggests hiring the right mix of specialists and generalists is important to reduce risks from relational losses while enjoying the performance benefits from relational gains.     

Can taxes raise output and reduce inequality? The case of lobbying

One of the key institutional elements for reducing inequality is the tax and transfer system. However, economists and policymakers usually view high taxes as detrimental to economic growth. We isolate one important mechanism by which higher taxes reduce inequality and raise per capita gross domestic product (GDP) at the same time. This mechanism operates in the presence of unproductive lobbying. Higher taxes induce a reallocation from lobbying toward production. This raises overall output and reduces the consumption gap between those who benefit from lobbying and those who bear its negative effects.     

Two faces of corporate lobbying: Evidence from the pharmaceutical industry

In this study, we examine how political connections increase firms’ innovation performance. By examining firm-level lobbying activities, we find that political connections lead to a greater number of medical breakthroughs among pharmaceutical firms in our sample. We then examine the underlying ways that political connections enhance innovation among medical firms. Using hand-collected data on government subsidies, we find that politically connected firms have a higher chance of receiving subsidies from federal, state, or local government agencies. These government subsidies enhance medical innovation by insulating managers from short-term threats and mitigate their career concerns by creating a “failure tolerant” environment. Overall, we show that connections between firms and politicians come with increased innovation outcomes.     

Financial industry lobbying and shareholder litigation outcomes: implications for managers and regulators

We examine the relationship between financial firm corporate lobbying, shareholder-based litigation outcomes, and firm value. We show that political lobbying lowers federal class action securities litigation likelihood for public financial institutions. Secondly, lobbying firms experience a higher likelihood of having litigation dismissed, and the average settlement amount is significantly lower for lobbying institutions. In addition, shortly after a litigation announcement, lobbying firms experience significantly higher cumulative abnormal returns (CARs), compared to non-lobbying firms. Finally, we show that lobbying firms have higher long-run buy-and-hold abnormal stock returns (BHARs) following lobbying activities. Our results link financial institution lobbying activity with improved legal outcomes and relatively higher firm value. While lobbying improves financial firm value, our results also imply that lobbying creates a disadvantage for non-lobbying firms within the industry. Our results provide insights, not only to corporate managers, but to regulators and policymakers interested in the impact of lobbying on the efficacy and objectivity of regulation and enforcement in the financial services industry.     

LOBBYING AND ELECTIONS

I analyse the interaction between post‐election lobbying and the voting decisions of forward‐looking voters. The existing literature has shown that in models with citizen candidates from a dispersed distribution of preferences, lobbying has no influence on implemented policy. In my model with ideological parties, lobbying is shown to have an effect on policy. In terms of welfare, I show that the median voter and the majority of voters can be better off with lobbying.