endogenous probability of policy diffusion by combining our model with a strategic lobbying approach. As a result, the … rate the domestic government has to account for the foreign firm’s lobbying activities otherwise it will choose a tax rate …

The compromise enhancing effect of lobbying on public policy has been established in two typical settings. In the first … demonstrate that in the latter setting, the compromising effect of lobbying need not exist. Our reduced-form, two-stage public …) desires to suckle thereby threatening the public well being more than the lobbying interest groups. The main result specifies …