Habitual and Occasional Lobbyers in the U.S. Steel Industry: An EM Algorithm Pooling Approach

Posted: 7 Jun 2013

See all articles by Randall Morck

Randall Morck

University of Alberta - Department of Finance and Statistical Analysis; National Bureau of Economic Research (NBER); European Corporate Governence Institute; Asian Bureau of Finance and Economic Research

Jungsywan H. Sepanski

Stephen M. Ross School of Business at the University of Michigan

Bernard Yin Yeung

National University of Singapore - Business School

Date Written: March 26, 2000

Abstract

Using U.S. steel firm data, we find that lobbying for import protection appears to be habit forming. To identify heterogeneity in lobbying behavior among firms, we use an expectation-maximization algorithm to sort our firms into groups with different propensities to lobby, and estimate the determinants of lobbying in each group. A two-pool model emerges: occasional lobbyers' lobbying depends on their market performance, and habitual lobbyers' lobbying only depends on past lobbying. The latter tends to be larger steel firms whose business is more focused in steel. Our evidence is consistent with dynamic economies of scale in protection seeking, breeding protection dependent firms.

JEL Classification: F13

Suggested Citation

Morck, Randall K. and Sepanski, Jungsywan H. and Yeung, Bernard Yin, Habitual and Occasional Lobbyers in the U.S. Steel Industry: An EM Algorithm Pooling Approach (March 26, 2000). Economic inquiry. 39(3) 365-378, 2001; University of Alberta School of Business Research Paper No. 2013-616. Available at SSRN: https://ssrn.com/abstract=2275452

Randall K. Morck (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

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National Bureau of Economic Research (NBER)

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Asian Bureau of Finance and Economic Research ( email )

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Jungsywan H. Sepanski

Stephen M. Ross School of Business at the University of Michigan ( email )

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United States
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Bernard Yin Yeung

National University of Singapore - Business School ( email )

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Singapore, 119245
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)

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