Political influence of firms in the tradables and non-tradables sectors:a cross-country analysis
2011
Yasar, Mahmut | Rejesus, Roderick M. | Chen, Yanjing | Chakravorty, Ujjayant
Recent theoretical studies have shown that firms lobby government agencies to influence the structure of trade policies. This article empirically examines whether firms classified as either exporting or import-competing (i.e. firms in the tradables sector) have differential levels of political influence relative to domestic firms that only produce non-traded goods (i.e. firms in the non-tradables sector). We use a rich firm-level, cross-sectional dataset from the World Business Environment Survey to achieve this objective. Results from the analysis reveal that exporting or import-competing firms do have more political influence relative to domestic firms that neither export nor produce import-competing goods. Market structure, firm age, firm size, government ownership, and dependence on public infrastructure also affect the extent of political influence that firms have.
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