Political Influence of Exporting and Import-Competing Firms: Evidence from Eastern European and Central Asian Countries

Mahmut Yasar

World Development, 2013, vol. 51, issue C, 154-168

Abstract: Theoretical studies have emphasized the role firms play in shaping laws and regulations through political activities. This paper examines whether import-competing firms and exporting firms possess differing levels of political influence by using firm-level data from 27 Eastern European and Central Asian countries. To control for endogeneity, we estimate a multivariate probit model using a simulated maximum-likelihood algorithm. We find that exporting firms have stronger political influence than import-competing firms, indicating that more free trade policies are the likely outcome of political-rent seeking in these countries. The results have significant implications for countries’ economic growth and development.

Keywords: political influence; emerging/transition economies; exporting firms; import-competing firms; lobbying; multivariate probit; rent-seeking; firm heterogeneity (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:51:y:2013:i:c:p:154-168

DOI: 10.1016/j.worlddev.2013.06.001

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