Endogenous Lobbying Position in Intra-industry Trade
Larry D. Qiu
Hong Kong University of Science & Technology (HKUST) - Department of Economics
Hong Kong University of Science and Technology
A two-country, two-firm model has been developed to study equilibrium lobbying positions in intra-industry trade. A firm chooses either a protectionist position or a free-trader position. The model predicts that taking the free-trader (protectionist) lobbying position is an efficient (inefficient) firm's dominant strategy. In addition, for any lobbying position taken by a firm, its lobbying effort always decreases as its production cost increases. The findings help shed light on some empirical observations.
Number of Pages in PDF File: 12
Keywords: Lobbying, Endogenous position, Intra-industry trade, Protectionist, Free trader
JEL Classification: F12, F13working papers series
Date posted: January 30, 2002
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