Abstract
Even though there is a well-known empirical and theoretical link between lobby and the free-rider problem, the existing literature only attributes its findings to the free-rider rather than the measurement of its extent. We develop broader theoretical micro-foundations for measuring free-riding and investigate the determinants of tariff rates from the perspective of corporate lobbying and free-riding. Our estimation result shows that the degree of free-riding not only varies across industries but is particularly high in larger industries indicating the underutilization of lobbying. The tariff rates under monopoly are about 8 times higher than under perfect competition in most industries suggesting that stakeholders should maintain higher industry protection levels through lobbying.
Original language | English |
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Pages (from-to) | 324-333 |
Number of pages | 10 |
Journal | Economic Modelling |
Volume | 60 |
DOIs | |
Publication status | Published - 2017 Jan 1 |
Keywords
- Free-rider problem
- Lobbying
- Tariffs
ASJC Scopus subject areas
- Economics and Econometrics