Voting for Protection: Does Direct Foreign Investment Influence Legislator Behavior?

Bruce Blonigen and David Figlio

Chapter 13 in Foreign Direct Investment, 2019, pp 447-471 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The political economy of trade protection has long been of interest to economists and policy makers. The idea that levels of protection may be endogenous with trade flows has been a particularly important issue in the literature. In general, the endogenous protection literature postulates that import penetration will cause domestic interests to lobby more intensely for protection. Thus, higher levels of import penetration lead to increased protection. As a result, a number of papers (see, for example, Arye L. Hillman, 1982; Wolfgang Mayer, 1984; Robert E. Baldwin, 1985; Stephen P. Magee et al., 1989; Ronald D. Fischer, 1992) have established that foreign firms will import less under a regime of endogenous protection than one where the level of protection is exogenous to trade flows. On the empirical side, Daniel Trefler (1993) finds that ignoring the endogeneity of trade and protection understates the impact of U.S. protection on imports by a magnitude of ten…

Keywords: Foreign Direct Investment; Multinational Enterprises; Mergers and Acquisitions; Greenfield; Trade Policy; Taxation; Spillovers; Offshoring; Wage Inequality; Firm-Specific Assets; Antidumping; Tariff-jumping; Industrial Organization; Ownership-Location-Internalization Theory (search for similar items in EconPapers)
JEL-codes: F02 F13 F6 (search for similar items in EconPapers)
Date: 2019
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Journal Article: Voting for Protection: Does Direct Foreign Investment Influence Legislator Behavior? (1998)
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