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Is skill dispersion a source of comparative advantage? In this paper we use microdata from the International Adult Literacy Survey to show that the effect of skill dispersion on trade flows is quantitatively similar to that of the aggregate endowment of human capital. In particular we investigate, and find support for, the hypothesis that countries with a more dispersed skill distribution specialize in industries characterized by lower complementarity of workers' skills. The result is robust to the introduction of controls for alternative sources of comparative advantage, as well as to alternative measures of industry-level skill complementarity. (JEL F14, F16, J24, J31)

This article offers a review of the recent empirical literature on lobbying within political economy. In surveying extant research, we emphasize quid pro quo and informational issues in special interest politics and highlight crucial open questions in both. The two main unresolved methodological issues remain ( a ) how to account for the impact of lobbying on which equilibrium policies are chosen and advanced and ( b ) how distorted those equilibrium policies are relative to the social optimum. Of the principal open questions within political economy, a comprehensive, quantitative assessment of the welfare effects of lobbying remains one of the most elusive.

Do lobbyists provide issue-specific information to members of Congress? Ordo they provide special interests access to politicians? We present evidence to assess the role of issue expertise versus connections in the US Federal lobbying process and illustrate how both are at work. In support of the connections view, we show that lobbyists follow politicians they were initially connected to when those politicians switch to new committee assignments. In support of the expertise view, we show that there is a group of experts that even politicians of opposite political affiliation listen to. However, we find a more consistent monetary premium for connections than expertise.

We explore the role of charitable giving as a means of political influence. For philanthropic foundations associated with large US corporations, we present three different identification strategies that consistently point to the use of corporate social responsibility in ways that parallel the strategic use of political action committee (PAC) spending. Our estimates imply that 6.3 percent of corporate charitable giving may be politically motivated, an amount 2.5 times larger than annual PAC contributions and 35 percent of federal lobbying. Absent of disclosure requirements, charitable giving may be a form of corporate political influence undetected by voters and subsidized by taxpayers.

Information sets, expectations, and preferences of politicians are fundamental, but unobserved determinants of their policy choices. Employing repeated votes in the US House of Representatives on China’s normal trade relations (NTR) status during the two decades straddling China’s World Trade Organization (WTO) accession, we apply a moment inequality approach designed to deliver consistent estimates under weak informational assumptions on the information sets of members of Congress. This methodology offers a robust way to test hypotheses about what information politicians have at the time of their decision and to estimate the weight that constituents, ideology, and other factors have in policy making and voting.

We employ a novel data set to estimate a structural econometric model of the decisions under risk of players in a game show where lotteries present payoffs in excess of half a million dollars. The decisions under risk of players in the presence of large payoffs allow us to estimate the parameters of the curvature of the von Neumann—Morgenstern utility function—not only locally, as in previous studies in the literature, but also globally. Our estimates of relative risk aversion indicate that a constant relative risk aversion parameter of about 1 captures the average of the sample population. We also find that individuals are practically risk neutral at small stakes and risk averse at large stakes—a necessary condition, according to Rabin's calibration theorem, for expected utility to provide a unified account of individuals' attitudes toward risk. Finally, we show that for lotteries characterized by substantial stakes, nonexpected utility theories fit the data equally as well as expected utility theory.

This paper examines the relationship between a manufacturing firm’s import behaviour and its performance. The focus is on two aspects of imports, input variety and the dynamics of import relationships. Using identification conditions borrowed from the production function estimation literature, we show that firms importing more products from a larger set of suppliers tend to be larger, more productive and more successful in export markets. Not only does the number of supply relationships matter but also the duration. Firms maintaining a higher share of continuous supply relationships also benefit from size and productivity effects. These results suggest that the breadth and depth of the import network are relevant factors for the performance of Canadian manufacturers, underscoring the importance of pursuing trade liberalizations with new partners and trade facilitation with established sources of suppliers. Cet article étudie le rapport entre les comportements d’importation d’une entreprise manufacturière et ses performances. Nous mettons l’accent sur deux aspects relevant des importations : la variété des intrants et la dynamique des relations avec les fournisseurs. En nous appuyant sur les conditions d’identification empruntées à la littérature sur l’estimation de la fonction de production, nous montrons que les entreprises important davantage de produits auprès d’un éventail plus large de fournisseurs ont tendance à être plus importantes, productives et prospères sur les marchés d’exportation. Et si le nombre de fournisseurs représente un paramètre important, la durée des relations d’affaires l’est tout autant. Les entreprises entretenant davantage de relations de longue durée avec leurs fournisseurs bénéficient également des effets de taille et de productivité. Ces résultats suggèrent que l’ampleur et la profondeur des réseaux d’importation représentent des facteurs pertinents quant à la performance des fabricants canadiens, et soulignent l’importance de poursuivre la libéralisation du commerce avec de nouveaux partenaires ainsi que la facilitation des échanges avec des sources d’approvisionnement établies.

This paper develops and empirically examines a model of relative productivity differences both within and across industries for small open economies. We decompose the effect of industry productivity on export performance into direct effect of own-firm productivity and an indirect effect of higher peer-firm productivity. In a sample of Chilean and Colombian plants, we find evidence of both a positive direct effect and a negative indirect effect. The empirical evidence supports our theoretical prediction that industryspecific factors of production and asymmetric substitutability between domestic and foreign varieties drive the negative indirect effect. Ce mémoire développe et examine empiriquement un modèle des différences de productivités relatives, á la fois á l'intérieur et entre les industries, pour des petites économies ouvertes. On décompose l'effet de la productivité industrielle sur la performance du secteur des exportations en un effet direct de la productivité de la firme particulière, et un effet indirect de la productivité des autres firmes dans l'industrie. Dans un échantillon d'établissements au Chili et en Colombie, on découvre á la fois un effet direct positif et un effet indirect négatif. Le travail empirique supporte les prédictions théoriques á savoir que les facteurs de production spécifiques á l'industrie et la substituabilité asymétrique entre les variétés domestiques et étrangères de produits sont au fondement de cet effet indirect.

Working Paper No. 26287 This paper offers a review of the recent empirical literature on lobbying within Political Economy. In surveying extant evidence, we emphasize quid-pro-quo and informational issues in special interest politics and we highlight crucial open research questions in both. The main unresolved methodological issues remain how to properly account for the impact of lobbying on which equilibrium policies are chosen and advanced, and on how distorted those equilibrium policies might be relative to the interests of the general public. Of the principal open questions within political economy, a comprehensive quantitative assessment of the welfare distortions of lobbying remains one of the most elusive

Working Paper No. 14771 This paper employs a novel data set on lobbying expenditures to measure the degree of within-sector political organization and to explore the determinants of the mode of lobbying and political organization across U.S. industries. The data show that sectors characterized by a higher degree of competition (more substitutable products and a lower concentration of production) tend to lobby more together (through a sector-wide trade association), while sectors with higher concentration and more differentiated products lobby more individually. The paper proposes a theoretical model to interpret the empirical evidence. In an oligopolistic market, firms can benefit from an increase in their product-specific protection measure, if they can raise prices and profits. They find it less profitable to do so in a competitive market where attempts to raise prices are more likely to reduce profits. In competitive markets firms are therefore more likely to lobby together thereby simultaneously raising tariffs on all products in the sector.