The Dynamics of Firm Lobbying
49 Pages Posted: 26 Feb 2014
Date Written: February 24, 2014
How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confirmed in studying how firms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its influence on firm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made.
Keywords: lobbying, political economy, immigration, H-1B
JEL Classification: D72, D73, D78, F22, F23, J61, O31, O38
Suggested Citation: Suggested Citation