The Dynamics of Firm Lobbying

William R. Kerr; William F. Lincoln; Prachi  Mishra

Article | American Economic Journal: Economic Policy | November 2014

The Dynamics of Firm Lobbying

by William R. Kerr, William F. Lincoln and Prachi Mishra

Abstract

We study the determinants of the dynamics of firm lobbying behavior using a panel data set covering 1998–2006. Our data exhibit three striking facts: (i) few firms lobby, (ii) lobbying status is strongly associated with firm size, and (iii) lobbying status is highly persistent over time. Estimating a model of a firm's decision to engage in lobbying, we find significant evidence that up-front costs associated with entering the political process help explain all three facts. We then exploit a natural experiment in the expiration in legislation surrounding the H-1B visa cap for high-skilled immigrant workers to study how these costs affect firms' responses to policy changes. We find that companies primarily adjusted on the intensive margin: the firms that began to lobby for immigration were those who were sensitive to H-1B policy changes and who were already advocating for other issues, rather than firms that became involved in lobbying anew. For a firm already lobbying, the response is determined by the importance of the issue to the firm's business rather than the scale of the firm's prior lobbying efforts. These results support the existence of significant barriers to entry in the lobbying process.

Keywords: lobbying; political economy; immigration; H-1B; Organizational Change and Adaptation; Policy; Immigration;

Format: Print

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Citation:

Kerr, William R., William F. Lincoln, and Prachi Mishra. "The Dynamics of Firm Lobbying." American Economic Journal: Economic Policy 6, no. 4 (November 2014): 343–379.

Working Paper | HBS Working Paper Series | 2018

Immigrant Entrepreneurship in America: Evidence from the Survey of Business Owners 2007 & 2012

Sari Pekkala Kerr and William R. Kerr

We study immigrant entrepreneurship and firm ownership in 2007 and 2012 using the Survey of Business Owners (SBO). The survival and growth of immigrant-owned businesses over time relative to native-founded companies is evaluated by linking the 2007 SBO to the Longitudinal Business Database (LBD). We quantify the dependency of the United States as a whole, as well as individual states, on the contributions of immigrant entrepreneurs in terms of firm formation and job creation. We describe differences in the types of businesses started by immigrants and the quality of jobs created by their firms. First-generation immigrants create about 25% of new firms in the United States, but this share exceeds 40% in some states. In addition, Asian and Hispanic second-generation immigrants start about 6% of new firms. Immigrant-owned firms, on average, create fewer jobs than native-owned firms, but much of this is explained by the industry and geographic location of the firms. Immigrant-owned firms pay comparable wages, conditional on firm traits, to native-owned firms, but are less likely to offer benefits.

Keywords: entrepreneurship; immigration; job creation; employee benefits; owner demographics; Exports; outsourcing; Entrepreneurship; Ownership; Demographics; Jobs and Positions; Compensation and Benefits; United States;

Citation:

Kerr, Sari Pekkala, and William R. Kerr. "Immigrant Entrepreneurship in America: Evidence from the Survey of Business Owners 2007 & 2012." Harvard Business School Working Paper, No. 18-098, April 2018. View Details

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This review discusses frontier topics in economic geography as they relate to firms and agglomeration economies. We focus on areas where empirical research is scarce but possible. We first outline a conceptual framework for city formation that allows us to contemplate what empiricists might study when using firm-level data to compare the functioning of cities and industries with each other. We then examine a second model of the internal structure of a cluster to examine possibilities with firm-level data for better exposing the internal operations of clusters. An overwhelming theme of our review is the vast scope for enhancements of our picture of agglomeration with the new data that are emerging.

Vodafone was operating in the fast-moving telecommunications market where innovation and scale were key. Faced with an onslaught of technological advances—big data, automation and artificial intelligence—CEO Vittorio Colao reflected on how he should change the organization to incorporate these advancements to improve the way the functions work, how to incorporate machine learning and artificial intelligence that de facto improve productivity and slash costs and what could he do to give back to society and make sure that new opportunities were created for the new generation.

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