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The Dynamics of Firm Lobbying

William Kerr (), William Lincoln () and Prachi Mishra

American Economic Journal: Economic Policy, 2014, vol. 6, issue 4, 343-79

Abstract: How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confirmed in studying how firms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its influence on firm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made.

JEL-codes: D22 D72 D78 L21 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/pol.6.4.343
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Handle: RePEc:aea:aejpol:v:6:y:2014:i:4:p:343-79