Live or Let Die : Firm Heterogeneity and Lobbying (original) (raw)

Abstract

21 avril 2007 Résumé As the increasing use of the non tariff barriers suggests it, firms are more and more interested in lobbying for a fixed cost. This paper provides a model that studies the effects of such a consideration, since it implies that inside a sector, some firms will win from the implementation of an additional fixed cost and other will lose. Therefore, opposed interests are present within a sector, thus inducing to relax the hypothesis of the "lobby sector". To represent these disparities, we introduce firm heterogeneity inside the sector. Our results confirm the importance of the heterogeneity, as it is the unique explanation for firm to enter in political activities. It also presents some predictions on the "national champ" strategy, the concentration in a sector and the stringency of the standards adopted. That is, a country that try to favor an elite will set more stringent standard and this will yield more concentrated sectors. J.E.L : F13,D70 ...

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