Job Market Paper

Abstract: Lobbying activities are important to the promotion of Free Trade Agreements (FTAs). I quantify the influence of lobbying on ratification probability of FTA by constructing a novel dataset containing all lobbying activities about FTAs in the United States. I develop a contest model of lobbing where heterogeneous players choose lobbying expenditures to affect the ratification probability of FTAs. I use structural gravity estimation to predict the trade profit gains from FTAs and use Maximum Likelihood estimation to back out the ratification probabilities. Results show that lobbying expenditures in manufacturing sector increase ratification probability by 21 percentage points on average, and the expected gains from lobbying are five times of the lobbying expenditures on average. Additionally, free riding lowers lobbying expenditures by 40%. These findings highlight the effects of lobbying on the formation of international agreements.

Other Papers

Abstract: Countries would increase export tax when import tariff is lower, according to Lerner Symmetry. However, with the historically low level of import barriers, export tax is still not popular among countries. One explanation is that the market power of exporters leaves little room for restrictive export policies. In this article, I explore optimal export policies when exporters have different levels of market power. I develop a multi-country-multi-sector general equilibrium gravity model, where sectors interact with each other through both labor market and substitution in demand. I derive a general form of optimal export policy and show analytically that export restriction decreases with exporters' market power and increases with cross-price elasticity of demand.