Date of Award

Spring 1-1-2018

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

First Advisor

David H. Bearce

Second Advisor

Andy Baker

Third Advisor

Sarah W. Sokhey

Fourth Advisor

Adrian J. Shin

Fifth Advisor

Jeronimo Carballo

Abstract

What explains variation in trade policy openness across countries? Past explanations have hinged on individual-level preferences expressed through a voting channel, especially to account for more liberal trade policy in democracies, but recent survey data calls the plausibility of this mechanism into question. In this three-paper dissertation, I focus on firm-level variation in preferences for free trade or protection, rooted in a New New Trade Theory (NNTT) framework. This theoretical response to classic and new trade theories emphasizes the heterogeneity of firms, and particularly the fundamental differences between exporting firms and domestically-oriented or import-competing firms.

Before proceeding with a firm-level explanation for trade policy variation, I argue that, while NNTT makes an important contribution to the study of trade outcomes and policies, its support has been demonstrated mostly in single-country case studies which cannot allow for analysis of ways in which domestic variables such as political institutions, economic development, and geography alter the markets in which firms operate. In a pooled sample of firms from approximately 150 countries, representing great geographic coverage and spanning various levels of political freedom and development, I find quantitative empirical support for NNTT’s global applicability but highlight ways in which its primary firm-level expectations are nuanced by domestic factors.

I then argue, and demonstrate empirically using cross-national and firm-level data, that the variable proportion of exporting firms exerting special interest pressure on policymakers alters the openness or restrictiveness of national trade policy outcomes. Furthermore, democratic and non-democratic leaders implement systematically different configurations of market entry regulations, which alters the ability of productive firms to participate in export markets. This, in turn, shapes the degree of pro-free-trade pressure faced by policymakers. This dissertation contributes to literatures on trade policy preferences and formation, firm-level heterogeneity, business lobbying, and political regimes.

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