Supplying Influence: Domestic Production Networks in Trade Politics

Why are some firms more successful than others in obtaining privileged treatment from their government? Trade policy, as an unusually targeted redistributive tool, offers a rich context to understand such questions of special interest politics and corporate power. Studying decisions on anti-dumping petitions in the U.S., we introduce a novel source of privileged treatment. We argue that firms with more linkages throughout the domestic economy enjoy a privileged political position. Benefits to these firms extend indirectly to a broader set of constituents, which allows firms to assemble broader coalitions and to portray protectionist policy as more than purely particularistic politics. We provide evidence for this argument by developing original measures of linkages between firms, derived from over 600,000 customer-supplier relationships among industries, matching them with data on anti-dumping petitions filed by U.S. firms, written briefs filed by Members of Congress on behalf of these firms, and the geographic distribution of industries. Our account identifies a new explanation of differences in the political influence of firms, underscores the relevance of domestic production networks in politics, and offers a new perspective on cleavages and coalitions in trade politics. Our results also suggest that the expansion of global supply chains, long considered a hallmark of political power, may have weakened the political clout of some of the largest firms by limiting their domestic footprint.