Political Influence of Exporting and Import-Competing Firms: Evidence from Eastern European and Central Asian Countries

Posted: 8 Jan 2020

See all articles by Mahmut Yasar

Mahmut Yasar

University of Texas at Arlington - Department of Economics; Emory University - Department of Economics

Date Written: November 1, 2013

Abstract

Theoretical studies have emphasized the role firms play in shaping laws and regulations through political activities. This paper examines whether import-competing firms and exporting firms possess differing levels of political influence by using firm-level data from 27 Eastern European and Central Asian countries. To control for endogeneity, we estimate a multivariate probit model using a simulated maximum-likelihood algorithm. We find that exporting firms have stronger political influence than import-competing firms, indicating that more free trade policies are the likely outcome of political-rent seeking in these countries. The results have significant implications for countries’ economic growth and development.

Keywords: political influence, emerging/transition economies, exporting firms, import-competing firms, lobbying, multivariate probit, rent-seeking, firm heterogeneity

JEL Classification: F13

Suggested Citation

Yasar, Mahmut, Political Influence of Exporting and Import-Competing Firms: Evidence from Eastern European and Central Asian Countries (November 1, 2013). World Development, Vol. 51, 154–168, 2013, Available at SSRN: https://ssrn.com/abstract=3505372

Mahmut Yasar (Contact Author)

University of Texas at Arlington - Department of Economics ( email )

701 S. West Street
Arlington, TX 76019
United States

Emory University - Department of Economics ( email )

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