Framing Business Interests: How Campaigns Affect Firms’ Positions on Preferential Trade Agreements
48 Pages Posted: 14 Oct 2015 Last revised: 20 Oct 2018
Date Written: October 17, 2018
What determines firm executives’ policy positions on public policies and to what extent can a government campaign affect such positions? We demonstrate that a government’s campaign can frame business elites, just as it can with the public, and that firms’ economic interests only weakly account for their policy positions. We leverage an original survey of Japanese firm executives on the Trans-Pacific Partnership Agreement (TPP) embedded in the sub-national variations of policy campaigns, where half of our respondents were exposed to location- and sector-specific anti-TPP campaigns and the rest were not. We find that company executives that operated in “negative campaign” prefectures are five percentage points more likely to predict that the TPP would harm their businesses after addressing a host of endogeneity issues. We further identify “a cascade of losers/winners” mechanism where firm executives rely on cues from the largest losers or winners of a policy change. The results revise the conventional wisdom that business elites are sophisticates who are immune to elite framing.
Keywords: international trade, preferential trade agreements, firms, framing effects
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