The number of firms and the politics of strategic trade policy

Incorporating home firms lobbying in a country into a third market model of affects the government's strategic oligopoly, this paper studies how, such lobbying affects export policy scheme. We pay special attention to the home firms' lobby formation and its affect on domestic welfare. The home firms can organize a lobby more easily when the number of their rival foreign firms is larger than that of them, and/or when the government is overly concerned with political contribution relative to domestic we fare. The strategic export policy under lobbying cannot improve the domestic welfare, which depends on the number of firms, the government's concern about political donation and the level of socially wasted lobbying costs.