The Political Economy of Tariff Exemption Grants
Abstract We investigate whether firm-level political connections affect the allocation of exemptions from tariffs imposed on $US 550 billion of Chinese goods imported to the United States annually beginning in 2018. Evidence points to politicians not only rewarding supporters but also punishing opponents: Past campaign contributions to the party controlling (in opposition to) the executive branch increase (decrease) approval likelihood. Our findings point to quid pro quo arrangements between politicians and firms, as opposed to the “information” channel linking political access to regulatory outcomes.
Authors
- Jesus M. Salas (ORCID: https://orcid.org/0000-0002-1037-8459)
- William L. Megginson (ORCID: https://orcid.org/0000-0001-6274-1590)
- Veljko Fotak (ORCID: https://orcid.org/0000-0002-5471-5648)
- Hye Seung Lee (ORCID: https://orcid.org/0000-0003-2035-9611)
Institutions
- Fordham University (US)
- Lehigh University (US)
- University of International Business (KZ)
- Department of Finance (AU)
- Bocconi University (IT)
Publication Details
- Journal
- Journal of Financial and Quantitative Analysis
- Published
- 2025-01-27
- DOI
- https://doi.org/10.1017/s0022109024000437
- Citations
- 5
- Primary Topic
- Political Influence and Corporate Strategies
- Type
- article
- Field-Weighted Citation Impact
- 11.13
Funders
- University at Buffalo
- School of Management, University at Buffalo