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Lobbying Behind the Frontier

Author

Listed:
  • Trebbi, Francesco
  • Bombardini, Matilde
  • CUTINELLI-RENDINA, Olimpia

Abstract

This chapter investigates the non-market response of firms to international trade shocks increasing the level of competition in U.S. industries. Lobbying expenditures increase as a consequence of import changes related to the China shock. The effect on lobbying is not homogeneous across firms and it concentrates particularly in those producers which are behind the technological frontier. We discuss theoretical mechanisms driving lobbying of firms away from the technological frontier: not only the cost-benefit trade-off between innovation and lobbying is relatively less appealing for low productivity firms, but the collective action ability of low productivity firms improves after a competitive shock.

Suggested Citation

  • Trebbi, Francesco & Bombardini, Matilde & CUTINELLI-RENDINA, Olimpia, 2021. "Lobbying Behind the Frontier," CEPR Discussion Papers 16390, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16390
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    Cited by:

    1. Baslandze, Salomé, 2021. "Barriers to Creative Destruction: Large Firms and Non-Productive Strategies," CEPR Discussion Papers 16570, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Lobbying; Schumpeterian growth; Special interest politics;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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