Voting for protection: Does direct foreign investment influence legislator behavior?

Bruce A. Blonigen, David N Figlio

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

The political economy of trade protection has long been of interest to economists and policy makers. The idea that levels of protection may be endogenous with trade flows has been a particularly important issue in the literature. In general, the endogenous protection literature postulates that import penetration will cause domestic interests to lobby more intensely for protection. Thus, higher levels of import penetration lead to increased protection. As a result, a number of papers (see, for example, Arye L. Hillman, 1982; Wolfgang Mayer, 1984; Robert E. Baldwin, 1985; Stephen P. Magee et al., 1989; Ronald D. Fischer, 1992) have established that foreign firms will import less under a regime of endogenous protection than one where the level of protection is exogenous to trade flows. On the empirical side, Daniel Trefler (1993) finds that ignoring the endogeneity of trade and protection understates the impact of U.S. protection on imports by a magnitude of ten.

Original languageEnglish (US)
Title of host publicationForeign Direct Investment
PublisherWorld Scientific Publishing Co.
Pages447-471
Number of pages25
ISBN (Electronic)9789813277014
ISBN (Print)9789813277007
DOIs
StatePublished - Jan 1 2019

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)
  • Social Sciences(all)

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