When do exporting firms impose trade barriers against their foreign competitors in global markets? In this paper, I contend that the decline of market power drives exporting firms’ support for restrictive trade policies. I develop a theoretical model showing that product obsolescence leads incumbent firms to lobby for international intellectual property protection, which raises barriers to entry within their markets. To test the theory, I estimate product life cycles using millions of patent citations and analyze U.S. lobbying reports filed on U.S. trade agreements that adopt higher standards for global patent protection. I find that U.S. exporters that manufacture products with longer life cycles lobby Congress more to pass the trade agreements. Their lobbying reports also reveal the risk of imitation in international trade using keywords, such as counterfeit. The results imply that global businesses operatin behind the technological frontier engage in political activity for entry deterrence.
Moderater: Rachel Wellhausen