The Dynamics of Firm Lobbying
William R. Kerr
Harvard University - Entrepreneurial Management Unit
William Fabius Lincoln
Robert Day School of Economics and Finance, Claremont McKenna College
International Monetary Fund (IMF) - Research Department
August 12, 2013
Harvard Business School Entrepreneurial Management Working Paper No. 12-034
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.
Number of Pages in PDF File: 48
Keywords: lobbying, political economy, immigration, H-1B
JEL Classification: D72, D73, D78, F22, F23, J61, O31, O38
Date posted: January 3, 2012 ; Last revised: August 13, 2013
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