Join hands or walk alone? Evidence on lobbying for trade policy in India

Saha, Amrita (2019) Join hands or walk alone? Evidence on lobbying for trade policy in India. Economics & Politics. ISSN 0954-1985

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Using primary evidence for 146 Indian manufacturing firms, I examine single and dual lobbying strategies for trade policy influence, and the factors driving firm's choice of these strategies. Firms can adopt a single strategy, by lobbying collectively as a group (Join Hands), or lobbying individually as a firm (Walk Alone). Firms can also adopt a dual strategy, that is, a combination of collective and individual lobbying. The choice of strategy is affected by sector concentration and by tradeoffs between lobbying intensity for sector‐wide and firm‐specific outcomes. The following findings are new for India: First, majority of Indian firms (more than 64% in the sample) use a dual strategy, suggesting the importance to better understand what drives dual strategies. Second, the likelihood of adopting a dual lobbying is higher in sectors that are characterized by low concentration (dispersion is higher), indicating a strong competition effect over free‐riding. Third, relative to the single strategy of collective lobbying, Indian manufacturing firms are likely to join hands while walking alone when targeting firm‐specific outcomes, but prefer to walk alone (single strategy of individual lobbying) when there are tradeoffs between different outcomes, to react quickly. Finally, the availability of resources and firm's perceived effectiveness of its lobbying are significant drivers for the strategy choice.

Item Type: Article
Schools and Departments: University of Sussex Business School > Economics
Institute of Development Studies
Subjects: H Social Sciences > HD Industries. Land use. Labour > HD0072 Economic development. Development economics. Economic growth
H Social Sciences > HF Commerce > HF1371 International trade
H Social Sciences > HF Commerce > HF1701 Tariff. Free trade. Protectionism
Depositing User: Amrita Saha
Date Deposited: 14 Oct 2019 12:27
Last Modified: 14 Oct 2019 12:27
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