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Live or let die : intra-sectoral lobbying on entry

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  • Vincent Rebeyrol

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Julien Vauday

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Since the GATT/WTO hinders tariffs manipulation, the Technical Barriers to Trade (TBT's) are a growing and appealing protection tool. The endogenous protection literature has shown that a government's taste for protection creates an incentive for lobbying. Since regulations at the origin of such barriers have to be borne also by domestic sectors, due to the National Treatment WTO's principle, this creates conflicts of interests within a sector enhancing an intra-sectoral competition. This paper develops a political economy framework based on common agency under complete information that highlights this issue. The political competition opposes productive versus non productive firms in this context rather than domestic versus foreign ones, contrasting with the literature. Some apparently unorganized sectors, i.e. that are not protected, may actually be sectors where lobbies are biased towards non productive firms. Therefore, we should be cautious when empirically studying the relationship between the levels of protection and contributions.

Suggested Citation

  • Vincent Rebeyrol & Julien Vauday, 2008. "Live or let die : intra-sectoral lobbying on entry," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00282331, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00282331
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00282331
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    Cited by:

    1. Lastauskas, Povilas, 2013. "Europe's revolving doors: Import competition and endogenous firm entry institutions," Kiel Advanced Studies Working Papers 464, Kiel Institute for the World Economy (IfW Kiel).
    2. Julien Vauday, 2008. "Heterogeneous lobbying efficiency," Documents de travail du Centre d'Economie de la Sorbonne bla08053, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Jennifer Abel-Koch, 2013. "Endogenous Trade Policy with Heterogeneous Firms," Working Papers 1306, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 01 Aug 2013.
    4. Kammerer, Hannes, 2013. "Lobbying for Subsidies with Heterogeneous Firms," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79767, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    firm heterogeneity; Endogenous protection; Truthful equilibrium; firm heterogeneity.; Protection endogène; équilibre Truthful; hétérogénéité des firmes.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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