NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Dynamics of Firm Lobbying

William R. Kerr, William F. Lincoln, Prachi Mishra

NBER Working Paper No. 17577
Issued in November 2011
NBER Program(s):   LE   LS   PE   POL   PR

We study the determinants of the dynamics of firm lobbying behavior using a panel data set covering 1998-2006. Our data exhibit three striking facts: (i) few firms lobby, (ii) lobbying status is strongly associated with firm size, and (iii) lobbying status is highly persistent over time. Estimating a model of a firm's decision to engage in lobbying, we find significant evidence that up-front costs associated with entering the political process help explain all three facts. We then exploit a natural experiment in the expiration in legislation surrounding the H-1B visa cap for high-skilled immigrant workers to study how these costs affect firms' responses to policy changes. We find that companies primarily adjusted on the intensive margin: the firms that began to lobby for immigration were those who were sensitive to H-1B policy changes and who were already advocating for other issues, rather than firms that became involved in lobbying anew. For a firm already lobbying, the response is determined by the importance of the issue to the firm's business rather than the scale of the firm's prior lobbying efforts. These results support the existence of significant barriers to entry in the lobbying process.

download in pdf format
   (367 K)

email paper

This paper is available as PDF (367 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17577

Kerr, William R., William F. Lincoln, and Prachi Mishra. "The Dynamics of Firm Lobbying." American Economic Journal: Economic Policy (forthcoming).

Users who downloaded this paper also downloaded these:
Bertrand, Bombardini, and Trebbi w16765 Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process
Igan, Mishra, and Tressel w17076 A Fistful of Dollars: Lobbying and the Financial Crisis
de Figueiredo and Tiller w7726 The Structure and Conduct of Corporate Lobbying: How Firms Lobby the Federal Communications Commission
Igan, Mishra, and Tressel A Fistful of Dollars: Lobbying and the Financial Crisis
de Figueiredo and Richter w19698 Advancing the Empirical Research on Lobbying
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us