We study the causal effect of firms' lobbying activities on the misallocation of resources through the distortion of firm size. To address the endogeneity between firms' lobbying expenditure and their size, we propose a new instrument. Specifically, we measure firms' political connections based on the geographic proximity between their headquarter locations and politicians' districts in the U.S., and trace the value of these networks over time by exploiting politicians' assignment to congressional committees. We find that a 10 percent increase in lobbying expenditure leads to a 3 percent gain in revenue. To investigate the macroeconomic consequences of these effects, we develop a heterogeneous firm-level model with endogenous lobbying. Using a novel dataset that we construct, we document new stylized facts about lobbying behavior and use them, including the one from the instrument, to estimate the model. Our counterfactual analysis shows that the return to firms' lobbying activities amounts to a 22 percent decrease in aggregate productivity in the U.S.

In Song Kim's research interests include International Political Economy, Formal and Quantitative Methodology.

The goal of the Interdisciplinary Seminar in Quantitative Methods is to provide an interdisciplinary environment where researchers can present and discuss cutting-edge research in quantitative methodology. The talks are aimed at a broad audience, with emphasis on conceptual rather than technical issues. The research presented is varied, ranging from new methodological developments to applied empirical papers that use methodology in an innovative way. We welcome speakers and audiences from all disciplines and fields, including the social, natural, biomedical, and behavioral sciences.