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Protection, lobbying, and market structure

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  • Hillman, Arye L.
  • Van Long, Ngo
  • Soubeyran, Antoine

Abstract

We analyze a model of lobbying by oligopolists who allocate resources between lobbying and internal cost-reducing activities. We ask the following questions: (i) if firms differ with respect to comparative advantage in lobbying, what is the equilibrium allocation of resources between lobbying and cost-reducing activities? (ii) can the possibility of lobbying reverse the profitability ranking among firms? (iii) under what condition is the conventional wisdom (that highly concentrated industries tend to obtain more protection) valid? On analyse un modèle de lobbying par des entrepreneurs qui allouent leur temps entre les activités de supervision. On donne des réponses aux questions suivantes: (i) quelles sont les allocations de ressources en équilibre? Le lobbying pourrait-il renverser l'ordre de rentabilité parmi les firmes? (iii) y a-t-il une corrélation entre le degré de concentration d'une industrie et la protection qu'elle obtient du gouvernement?
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  • Hillman, Arye L. & Van Long, Ngo & Soubeyran, Antoine, 2001. "Protection, lobbying, and market structure," Journal of International Economics, Elsevier, vol. 54(2), pages 383-409, August.
    • Handle: RePEc:eee:inecon:v:54:y:2001:i:2:p:383-409
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    Cited by:

    1. Naylor, Robin & Soegaard, Christian, 2018. "The Effects of Entry in Oligopolistic Trade with Bargained Input Prices," Economic Research Papers 269084, University of Warwick - Department of Economics.
    2. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo.
    3. Subhayu Bandyopadhyay & Eun‐Soo Park & Howard J. Wall, 2004. "Endogenous Export Subsidies And Welfare Under Domestic Cost Heterogeneity," Economics and Politics, Wiley Blackwell, vol. 16(3), pages 347-366, November.
    4. Tavares, Samia, 2006. "Deeper Integration and Voting on the Common European External Tariff," MPRA Paper 960, University Library of Munich, Germany.
    5. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    6. Andrew Dick, 1995. "Explaining Managed Trade as Rational Cheating (Forthcoming in Review of International Economics)," UCLA Economics Working Papers 730, UCLA Department of Economics.
    7. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo.
    8. Koziashvili, Arkadi & Nitzan, Shmuel & Tobol, Yossef, 2010. "Bureaucracy Norms and Market Size," Economics Series 259, Institute for Advanced Studies.
    9. Larry D. Qiu, 2008. "Endogenous Lobbying Positions," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 641-653, September.
    10. Tavares, Samia, 2006. "The Common External Tariff in a Customs Union: Voting, Logrolling, and National Government Interests," MPRA Paper 959, University Library of Munich, Germany.
    11. Chia Chiun Ko & Paul Frijters & Gigi Foster, 2018. "A Tale of Cyclones, Exports and Surplus Forgone in Australia's Protected Banana Industry," The Economic Record, The Economic Society of Australia, vol. 94(306), pages 276-300, September.
    12. Lasserre, Pierre & Soubeyran, Antoine, 2003. "A Ricardian model of the tragedy of the commons," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 29-45, January.
    13. Bombardini, Matilde & Trebbi, Francesco, 2012. "Competition and political organization: Together or alone in lobbying for trade policy?," Journal of International Economics, Elsevier, vol. 87(1), pages 18-26.
    14. Robin Naylor & Christian Soegaard, 2022. "Profit‐raising entry under oligopolistic trade with endogenous input prices," The World Economy, Wiley Blackwell, vol. 45(7), pages 2135-2164, July.
    15. Ngo Van Long & Antoine Soubeyran, 2003. "A Theory of Favoritism under International Oligopoly," CIRANO Working Papers 2003s-15, CIRANO.
    16. Huilan Tian, 2003. "Eco‐labelling scheme, environmental protection, and protectionism," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(3), pages 608-633, August.
    17. Samia Tavares, 2006. "The political economy of the European customs classification," Public Choice, Springer, vol. 129(1), pages 107-130, October.
    18. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.
    19. Saha, Amrita, 2019. "Trade policy & lobbying effectiveness: Theory and evidence for India," European Journal of Political Economy, Elsevier, vol. 56(C), pages 165-192.
    20. Kim, Young-Han & Kim, Sang-Kee, 2012. "Welfare effects of competitive lobbying efforts in international oligopoly markets," Economic Modelling, Elsevier, vol. 29(3), pages 614-620.
    21. Tomaso Duso & Astrid Jung, 2007. "Market Conduct and Endogenous Lobbying: Evidence from the U.S. Mobile Telecommunications Industry," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 9-29, March.
    22. Panagariya, Arvind & Findlay, Ronald & DEC, 1994. "A political - economy analysis of free trade areas and customs unions," Policy Research Working Paper Series 1261, The World Bank.
    23. Catola, Marco & D'Alessandro, Simone, 2020. "Market competition, lobbying influence and environmental externalities," European Journal of Political Economy, Elsevier, vol. 63(C).

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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