Interindustry Goods Market Networks and Industry Lobbying for Trade Policy

This study investigates how interindustry goods market networks influence industry lobbying as foreign firms’ direct investment and local production increase in the United States. The goods market networks consist of each sector’s procurement of inputs from other sectors and the sectoral destination...

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Bibliographic Details
Published in:Foreign policy analysis 2017-01, Vol.13 (1), p.50-73
Main Author: Lee, Hak-Seon
Format: Article
Language:English
Subjects:
Demand analysis
Destinations
Economic models
Empirical analysis
Foreign companies
Foreign investment
Industrial policy
Industrial production
Investment
Lobbying
Market shares
Markets
Networks
Prices
Procurement
Production increases
Purchasing
Sales
Supply
Supply chains
Trade policy
Upstream
Citations: Items that this one cites
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Summary:This study investigates how interindustry goods market networks influence industry lobbying as foreign firms’ direct investment and local production increase in the United States. The goods market networks consist of each sector’s procurement of inputs from other sectors and the sectoral destinations of its outputs. I found that domestic upstream sectors modify their lobbying in ways dissimilar to those of downstream sectors when foreign firms’ local production and sales increase. Upstream sectors lobby more when US affiliates of foreign firms that procure inputs from their own supply chains gain market share at the expense of domestic firms in investment-receiving sectors. In contrast, downstream sectors lobby less when they save input procurement costs as domestic and foreign firms compete to produce quality goods at a lower price. The empirical results imply that goods market networks provide another theoretical framework, in addition to that provided by factor or sector models, in the analysis of demand side of trade policy.
ISSN:1743-8586
1743-8594
DOI:10.1111/fpa.12059