The Charmed Life of Superstar Exporters: Survey Evidence on Firms and Trade Policy

Abstract

What factors determine firms' attitudes toward trade policy? This paper considers producers' policy preferences and political behavior in light of two key patterns in modern international trade: industries that face import competition often have many exporters, and foreign sales are concentrated in the hands of a small number of "superstar" exporters. Using a new survey of Costa Rican firms matched to systematic firm-level data on export behavior, we find that firm features are generally more important predictors of attitudes toward trade liberalization than industry-wide comparative advantage. We also show that export intensity is strongly associated with interest and lobbying activity on trade policy. The largest exporters, who are the strongest supporters of global integration, dominate trade politics.

New trade, new politics: intra-industry trade and domestic political coalitions

“…Several recent studies emphasize how firm characteristics can better explain trade preferences À and lobbying behavior À than industry characteristics. Osgood et al (2016) and Plouffe (2016) both use survey evidence to show that exporting firms are more likely to prefer trade liberalization than non-exporting firms. Plouffe (2014) and Kim (2013) find that only highly productive firms are likely to lobby for trade liberalization, while Osgood (2016a) argues that the most productive firms may actually oppose increased liberalization of a partially open economy, as their slightly less productive compatriots are likely to be the primary beneficiaries of increased foreign market access.…”

Firms and Global Value Chains: Identifying Firms’ Multidimensional Trade Preferences

“…Our work builds upon the growing literature on firm-level theories of international political economy (Weymouth and Broz, 2013;Plouffe, 2015;Osgood, 2016;Osgood et al, 2017). It is directly related to Meckling and Hughes (2017) who examine the effects of firm's participation in GVCs on their trade preferences.…”

Trade at the margin: Estimating the economic implications of preferential trade agreements

“…Hence these firms probably know well in advance of the benefits coming along with trade liberalization and might lobby accordingly. As these firms should also be larger in size their voice in the trade liberalization process might well sound loud (see also Osgood et al 2017 on this point). In contrast, the benefits of trade liberalization for differentiated products seem more diffuse.…”

“…While there exist an emerging literature in political science evaluating the implications of firm level heterogeneity on trade preferences and trade policy lobbying (Plouffe 2017;Jensen et al 2015;Kim 2017;Osgood 2017;Osgood et al 2017), few empirical studies evaluate the effect of PTAs on the firm or even product level.…”