Capital mobility and corporate lobbying are often emphasized as key drivers of international trade policy. Most empirical research on the topic, however, has focused on the industry level or some level of geographical aggregation. We address this gap by examining the role of firm-level capital mobility in shaping trade protection. We unfold a two-stage argument, where it is more costly for firms with immobile assets to reorganize production in the face of international competition. This makes them lobby more intensively for protection. But because protectionism is costly, decision-makers have a limit to how much they will implement. This forces companies to compete for trade protection, and the success of immobile firms will decrease the likelihood that others gain protection as well. To test this argument, we marshal a dataset of approximately 2,500 antidumping petitions and combine it with financial data on the firms filing them – a total of roughly 1,000 companies from 25 WTO countries in the period 2005-2015. Using spatial autoregressive (SAR) models, we show that companies with less mobile assets are, on average, more likely to be successful when petitioning for trade protection. Additionally, we find that the success of the immobile companies decreases the protection afforded to the firms they compete with for antidumping duties.
|Number of pages||23|
|Publication status||Published - 2017|
|Event||American Political Science Association, APSA Annual Meeting 2017: The Quest for Legitimacy: Actors, Audiences, and Aspirations - San Francisco, United States|
Duration: 31 Aug 2017 → 3 Sep 2017
Conference number: 113
|Conference||American Political Science Association, APSA Annual Meeting 2017|
|Period||31/08/2017 → 03/09/2017|