Inter-Regional Trade and Lobbying

Sergei Guriev (), Evgeny Yakovlev and Ekaterina Zhuravskaya ()

No w0100, Working Papers from Center for Economic and Financial Research (CEFIR)

Abstract: In a federation, local policies with inter-regional spillovers depend on the extent and the nature of local capture. Local lobbyists who have multi-regional scope internalize inter-jurisdictional externalities to a larger extent than the lobbyists with interests in a single region. In particular, multi-regional industrial groups lobby for lower interregional trade barriers than local industrial lobbies. The results are based on a simple model, case-study evidence, and econometric analysis of micro-level panel data from Russia. Controlling for firm-level fixed effects, the performance of firms increases with an increase in the number of neighboring regions captured by multiregional groups. The paper has implications for international trade: lobbying by multinationals should lead to lower protectionism compared to lobbying by national corporations.

JEL-codes: P26 D78 F15 F23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-pol and nep-tra
Date: 2007-04
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