Intra-Industry Competition for Political Influence: An Empirical Investigation of U.S. Steel Industry Firms' Lobbying

Jose Anson, Universal Postal Union

Abstract

Roll call voting at U.S. Congress has been extensively studied, but its analyses have often focused on the question: do electoral campaign contributions buy policies? By so-doing, expenditures in informing politicians were omitted. Our empirical investigation of the intra-industry competition for political influence in the steel industry uses both PAC electoral campaign contributions and lobbying expenditures data according to the Lobbying Disclosure Act of 1995. A U.S. roll call vote is analyzed at the firm level for the first time, thus avoiding sectoral aggregation of PAC contributions. Econometric results supports the view of informational lobbying expenditures being a complement to PAC contributions and enabling vertical differentiation; resources spent in informational lobbying increase the quality of PAC contributions and thereby increased the political support for trade protection as low-profit steel producers were requiring.