Skip to main content

Firm Heterogeneity and Trade-Policy Stances Evidence from a Survey of Japanese Producers


Recent research in international political economy has begun to explore the implications of producer heterogeneity for trade politics. Variations in productivity and size lead to systematic variations in market behaviors, especially with respect to firms’ abilities to engage foreign markets. This heterogeneity similarly leads to systematic variations in policy stances: Highly productive firms are more likely to favor trade liberalization than their less productive counterparts. I test the role of firm heterogeneity on trade-policy stances using original and representative survey data of Japanese manufacturers. I find that highly productive firms are more likely to favor liberalization than others, while a large portion of producers is indifferent to trade-policy reform. Other producers do not know how they would be impacted by liberalization; these tend to be smaller than their counterparts. The relationship between productivity and pro-trade attitudes is robust, even when controlling for a wide range of internationalization modes.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

      Note you can select to send to either the or variations. ‘’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Firm Heterogeneity and Trade-Policy Stances Evidence from a Survey of Japanese Producers
      Available formats
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about sending content to Dropbox.

      Firm Heterogeneity and Trade-Policy Stances Evidence from a Survey of Japanese Producers
      Available formats
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about sending content to Google Drive.

      Firm Heterogeneity and Trade-Policy Stances Evidence from a Survey of Japanese Producers
      Available formats
Corresponding author
* Corresponding author: Michael Plouffe, School of Public Policy, University College London, e-mail:
Hide All

I thank Lawrence Broz, Peter Cowhey, Christina Davis, Stephan Haggard, Gordon Hanson, James Hollyer, Jason Kuo, Daniel Maliniak, Marc Muendler, Megumi Naoi, Chris O'Keefe, Iain Osgood, Ken Scheve, Neil Visalvanich, and several anonymous reviewers for insightful comments and suggestions. This research was supported in part by JSPS (A: Globalization and Domestic Politics). Earlier versions of this paper were presented at the 2011 meetings of the American Political Science Association and the International Political Economy Society.

Hide All
Abel-Koch Jennifer. 2013a. “Endogenous Trade Policy with Heterogeneous Firms.” Manuscript.
Abel-Koch Jennifer. 2013b. “Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data.” The World Economy 36 (8): 10411064.
Alt James E., Frederik Carlsen Per Heum, and Johansen Kare. 1999. “Asset Specificity and the Political Behavior of Firms: Lobbying for Subsidies in Norway.” International Organization 53 (1): 99116.
Alt James and Gilligan Michael. 1994. “The Political Economy of Trading States: Factor Specificity, Collective Action Problems and Domestic Political Institutions.” Journal of Political Philosophy 2 (2): 165192.
Alvarez Roberto and Lopez Ricardo A.. 2005. “Exporting and Performance: Evidence from Chilean Plants.” Canadian Journal of Economics 38 (4): 13841400.
Bauer Raymond Augustine, de Sola Pool Ithiel, and Dexter Lewis Anthony. 1972. American Business and Public Policy: The Politics of Foreign Trade, Second Edition. Chicago: Aldine-Atherton, Inc.
Bernard Andrew B., Eaton Jonathan, Jensen J. Bradford, and Kortum Samuel S.. 2003. “Plants and Productivity in International Trade.” American Economic Review 93 (4): 12681290.
Bernard Andrew B., Grazzi Marco, and Tomasi Chiara. 2015. “Intermediaries in International Trade: Products and Destinations.” Review of Economics and Statistics 97 (4): 916920.
Bernard Andrew B, Bradford Jensen J., Redding Stephen J., and Schott Peter K.. 2007a. “Firms in International Trade.” Journal of Economic Perspectives 21(3): 105130.
Bernard Andrew B., Jensen J. Bradford, Redding Stephen J., and Schott Peter K.. 2012. “The Empirics of Firm Heterogeneity and International Trade.” Annual Review of Economics 4: 283313.
Bernard Andrew B., Redding Stephen J., Schott Peter K.. 2007b. “Comparative Advantage and Heterogeneous Firms.” Review of Economic Studies 74: 3166.
Blonigen Bruce. 2008. “New Evidence on Trade Policy Preferences.” Working Paper No. 14,627. NBER
Blonigen Bruce. 2011. “Revisiting the Evidence on Trade Policy Preferences.”Journal of International Economics 85 (1): 129135.
Bombardini Matilde. 2008. “Firm Heterogeneity and Lobby Participation.” Journal of International Economics 75: 329348.
Bombardini Matilde and Trebbi Francesco. 2012. “Competition and Political Organization: Together or Alone in Lobbying for Trade Policy?Journal of International Economics 87 (1): 1826.
Chang Pao-Li and Willmann Gerald. 2006. “Protection for Sale with Heterogeneous Interests within Industries.” Manuscript.
Gawande Kishore and Bandyopadhyay Usree. 2000. “Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection.” The Review of Economics and Statistics 82 (1): 139152.
Gawande Kishore and Hoekman Bernard. 2006. “Lobbying and Agricultural Trade Policy in the United States.” International Organization 60 (3): 527661.
Goldberg Pinelopi Koujianou and Maggi Giovanni. 1999. “Protection for Sale: An Empirical Investigation.” The American Economic Review 89 (5): 11351155.
Gilligan Michael J. 1997. “Lobbying as a Private Good with Intra-Industry Trade.” International Studies Quarterly 41: 455474.
Grossman Gene M. and Helpman Elhanan. 1994. “Protection for Sale.” American Economic Review 84 (4): 833850.
Guisinger Alexandra. 2009. “Determining Trade Policy: Do Voters Hold Politicians Accountable?International Organization 63 (2): 533557.
Hainmueller Jens and Hiscox Michael J.. 2006. “Learning to Love Globalization: Education and Individual Attitudes Toward International Trade.” International Organization 60: 469498.
Hayakawa Kazunobu, Machikita Tomohiro, and Kimura Fukunari. 2012. “Globalization and Productivity: A Survey of Firm-level Analysis.” Journal of Economic Surveys 26 (2): 332350.
Head Keith and Ries John. 2003. “Heterogeneity and the FDI versus Export Decision of Japanese Manufacturers.” Journal of Japanese and International Economies 17: 448467.
Helpman Elhanan, Itskhoki Oleg, and Redding Stephen. 2010. “Unequal Effects of Trade on Workers with Different Abilities.” Journal of the European Economic Association 8 (2–3): 421433.
Helpman Elhanan, Melitz Marc, and Yeaple Stephen. 2004. “Export Versus FDI with Heterogeneous Firms.” American Economic Review 94 (1): 300316.
Hiscox Michael. 2001. “Class versus Industry Cleavages: Inter-Industry Factor Mobility & the Politics of Trade.” Industrial Organization 55 (1): 146.
Hiscox Michael. 2002. “Commerce, Coalitions and Factor Mobility.” American Political Science Review 96 (3): 593608.
Japan Small Business Research Institute. 2010. White Paper on Small and Medium Enterprises in Japan: Pulling Through the Crisis.
Jensen J. Bradford, Quinn Dennis P., and Weymouth Stephen. 2015. “The Influence of Firm Global Supply Chains and Foreign Currency Undervaluations on U.S. Trade Disputes.” International Organization 69 (4): 913.
Johns Leslie and Wellhausen Rachel L.. 2016. “Under One Roof: Supply Chains and the Protection of Foreign Investment.” American Political Science Review 110 (1): 3151.
Kasahara Hiroyuki and Lapham Beverly. 2013. “Productivity and the Decision to Import and Export: Theory and Evidence.” Journal of International Economics 89 (2): 297316.
Kim In Song. 2016. “Political Cleavages within Industry: Firm Level Lobbying for Trade Liberalization.” Manuscript.
Kim In Song, Milner Helen V., Bernauer Thomas, Spilker Gabriele, Osgood Iain, and Tingley Dustin. 2016. “Firms’ Preferences over Multidimensional Trade Policies: Global Production Chains, Investment Protection and Dispute Settlement Mechanisms.” Manuscript.
Kimura Fukunari and Kiyota Kozo. 2006. “Exports, FDI, and Productivity: Dynamic Evidence from Japanese Firms.” Review of World Economics 142 (4): 695719.
Kiyota Kozo and Urata Shujiro. 2008. “The Role of Multinational Firms in International Trade: The Case of Japan.” Japan and the World Economy 20 (3): 338352.
Kuno Arata and Naoi Megumi. 2015. “Framing Business Interests: How Campaigns Affect Firms’ Positions on Preferential Trade Agreements.” Manuscript.
Kuo Jason. 2011. “Favoring International Trade for Profits: Survey Evidence from Four Asia-Pacific Countries.” Manuscript.
Madeira Mary Anne. 2013. “The New Politics of the New Trade: The Political Economy of Intra-Industry Trade.” PhD Dissertation, University of Washington.
Mansfield Edward D. and C. Mutz Diana. 2009. “Support for free trade: Self-interest, sociotropic politics, and out-group anxietyInternational Organization 63 (3): 425457.
Mayda Anna Maria and Rodrik Dani. 2005. “Why are Some People (and Countries) More Protectionist than Others?European Economic Review 49: 13931430.
Melitz Marc J. 2003. “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity.” Econometrica 71 (6): 16951725.
Melitz Marc J. and Ottaviano Gianmarco IP. 2008. “Market Size, Trade, and Productivity.” Review of Economic Studies 75 (1): 295316.
Milner Helen. 1988. Resisting Protectionism: Global Industries and the Politics of International Trade. Princeton, NJ: Princeton University Press.
Nadeau Richard, Niemi Richard G., Fan David P., and Amato Timothy. 1999. “Elite Economic Forecasts, Economic News, Mass Economic Judgments, and Presidential Approval.” The Journal of Politics 61 (1): 109135.
Naoi Megumi and Kume Ikuo. 2011. “Explaining Mass Support for Agricultural Protectionism: Evidence from a Survey Experiment During the Great Recession.” International Organization 65 (4): 771795.
Osgood Iain. 2016. “Differentiated Products, Divided Industries: Firms and the Politics of Intra-Industry Trade.Economics and Politics forthcoming.
Osgood Iain, Tingley Dustin, Kim In Song, Bernauer Thomas, Milner Helen V., and Spilker Gabrielle. 2016. “The Charmed Life of Superstar Exporters: Firms and Trade Policy in Costa Rica.” Journal of Politics forthcoming.
Plouffe Michael. 23 October 2011. “Firms and Foreign Market Engagement: Internationalization Activities among Japanese Firms.” Manuscript presented at the meeting of the Japan Society of International Economics, Tokyo.
Plouffe Michael. 2012. “Liberalization for Sale: Heterogeneous Firms and Lobbying over FTAs.” Manuscript prepared for the meeting of the American Political Science Association, New Orleans, Louisiana.
Plouffe Michael. 2013. ‘The New Political Economy of Trade: Heterogeneous Firms and Trade Policy.’ PhD Dissertaiton, UC San Diego.
Plouffe Michael. 2015. “Heterogeneous Firms and Policy Preferences.” In The Oxford Handbook of the Political Economy of International Trade, edited by Martin Lisa. Oxford: Oxford University Press. 196212.
Rogowski Ronald. 1987. “Political Cleavages and Changing Exposure to Trade.” American Political Science Review 81 (4): 11211137.
Roh Sungmin and Tomz Michael. 2015. “Industry, Self-Interest, and Individual Preferences over Trade Policy.” Manuscript.
Scheve Kenneth and Slaughter Matthew J.. 2001. “What Determines Individual Trade-Policy Preferences?Journal of International Economics 54 (2): 267292.
Şeker Murat. 2012. “Importing, Exporting, and Innovation in Developing Countries.” Review of International Economics 20 (2): 299314.
Tomiura Eiichi. 2007. “Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level.” Journal of International Economics 72 (1): 113127.
Tomiura Eiichi, Ito Banri, and Wakasugi Ryuhei. 2011. “Offshore Outsourcing Decision and Capital Intensity: Firm-Level Relationships.” Economic Inquiry 49 (2): 364378.
Wakasugi Ryuhei and Tanaka Ayumu. 2012. “Firm Heterogeneity and Internationalization: Evidence from Japanese Firms.” Millennial Asia 3 (1): 4570.
Woll Cornelia. 2008. Firm Interests: How Governments Shape Business Lobbying on Global Trade. Ithaca, NY: Cornell University Press.
Wooldridge Jeffrey M. 2009. “On Estimating Firm-Level Production Functions Using Proxy Variables to Control for Unobservables.” Economics Letters 104: 112114.
Yeaple Stephen R. 2005. “A Simple Model of Firm Heterogeneity, International Trade, and Wages.” Journal of International Economics 61 (1): 120.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Business and Politics
  • ISSN: -
  • EISSN: 1469-3569
  • URL: /core/journals/business-and-politics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Full text views

Total number of HTML views: 95
Total number of PDF views: 153 *
Loading metrics...

Abstract views

Total abstract views: 311 *
Loading metrics...

* Views captured on Cambridge Core between 31st January 2017 - 21st November 2017. This data will be updated every 24 hours.