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      Political Cleavages within Industry: Firm-level Lobbying for Trade Liberalization

      American Political Science Review
      Cambridge University Press (CUP)

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          Abstract

          Existing political economy models explain the politics of trade policy using inter-industry differences. However, this article finds that much of the variation in U.S. applied tariff rates in fact arises within industry. I offer a theory of trade liberalization that explains how product differentiation in economic markets leads to firm-level lobbying in political markets. High levels of product differentiation eliminates the collective action problem faced by exporting firms while import-competing firms need not fear product substitution. To test this argument, I construct a new dataset on lobbying by all publicly traded manufacturing firms from reports filed under the Lobbying Disclosure Act of 1995. I find that productive exporting firms are more likely to lobby to reduce tariffs, especially when their products are sufficiently differentiated. I also find that highly differentiated products have lower tariff rates. The results challenge the common focus on industry-level lobbying for protection.

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          Most cited references43

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          The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity

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            The Dynamics of Productivity in the Telecommunications Equipment Industry

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              Exceptional exporter performance: cause, effect, or both?

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                Author and article information

                Journal
                American Political Science Review
                Am Polit Sci Rev
                Cambridge University Press (CUP)
                0003-0554
                1537-5943
                February 2017
                February 24 2017
                February 2017
                : 111
                : 1
                : 1-20
                Article
                10.1017/S0003055416000654
                0f67894c-5f1e-46d1-9d08-6493941f89d3
                © 2017

                https://www.cambridge.org/core/terms

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