Commerce, Coalitions, and Global Value Chains: Coordinated and Collective Lobbying on Trade

Abstract

Global value chains (GVCs) have connected firms in complex networks within and across national borders. However, political economy models often assume away production linkages and thus fail to explain pervasive and diverse trade coalitions cutting across industries and firms. I develop a GVC-centered framework where production linkages through a common foreign partner foster interdependent preferences and collective action for trade liberalization. For empirical tests, I compile firm-to-firm supply chain networks, construct direct measures, and estimate various network models. I find that US firms with GVC linkages tend to lobby together, lobby on the same bill, and hire the same lobbyist. Furthermore, GVC linkages among lead firms increase collective lobbying through trade associations. Finally, I show that GVC linkages predict the formation and depth of preferential trade networks. These results provide microfoundations for new coalitional politics under GVCs and challenge the common assumption about industries and firms as isolated political actors.

Keywords: global value chain, trade coalition, trade politics, preferential trade liberalization, firm