Trade,Foreign Direct Investment,and Immigration Policy Making 817 costs of immigrants as the source of anti-immigrant sentiment.27 Finally,immigrants typically are pro-immigration to protect their position in society and/or to bring in friends and family;however,immigrants tend not to be a powerful group.Until they gain the rights of citizens (and,sometimes,not even then),immigrants can be expelled from the country,which limits their political power.Nonetheless,the rela- tive power of these groups is likely to affect the level of openness to immigration and these groups are likely to have different amounts of power in different countries, which would affect their openness to immigration.In the empirical analysis below, I control for these other factors. I focus on firms'support for immigration because whereas these other groups likely play a role in LSIP formation,firms are the most powerful group that could be pro-immi- gration.Given firms'important role in LSIP,I examine how their preferences change because of changes in productivity,trade openness,and firm mobility and how policy- makers respond to these changes.In the United States,a low-skill labor-scarce economy,trade openness,and increases in firm mobility should affect the preferences of firms that are low-skill labor intensive and/or less productive the most,which also are the firms that use the most low-skill immigrant labor.Openness to foreign goods and increasing firm mobility,therefore,may not need to affect the entire economy for them to have an effect on LSIP;instead,they need to affect only low-skill-intensive firms. Low-Skill Immigration Policy Under Autarky To contrast the effects of trade openness and firm mobility,I begin by examining support for LSIP by firms under trade protection and limited opportunities to move abroad (autarky).The goal of firms when they interact with policy-makers is to convince policy-makers to pass policies that decrease their costs and increase their profitability.Firms do not necessarily have a preference over which policy policy-makers choose so they are likely indifferent between LSIP that lowers their labor costs and some other policy that lowers other costs or increases profits. Firms across and within industries differ in their need for low-skill labor;some indus- tries are more capital and/or high-skill-intensive and some firms within an industry are more productive.The terms low-skill labor intensive and low-productivity are used somewhat interchangeably.In economics,these two aspects of the firms are treated as separate and the effect of trade is modeled differently:differences in the factor intensity of production is modeled by the Ricardo-Viner model and productivity differences are modeled by the Melitz and other similar models.28 In the real world,firms differ on both dimensions-some firms in low-skill labor-intensive industries are more productive than others and some industries are more capital/high-skill-intensive than others. What is important for this analysis is that these two dimensions collapse when one examines preferences on immigration;henceforth,less-productive and 27.For example,see Gimpel and Edwards 1999;and Hanson,Scheve,and Slaughter 2007. 28.Melitz 2003.costs of immigrants as the source of anti-immigrant sentiment.27 Finally, immigrants typically are pro-immigration to protect their position in society and/or to bring in friends and family; however, immigrants tend not to be a powerful group. Until they gain the rights of citizens (and, sometimes, not even then), immigrants can be expelled from the country, which limits their political power. Nonetheless, the rela￾tive power of these groups is likely to affect the level of openness to immigration and these groups are likely to have different amounts of power in different countries, which would affect their openness to immigration. In the empirical analysis below, I control for these other factors. I focus on firms’ support for immigration because whereas these other groups likely play a role in LSIP formation, firms are the most powerful group that could be pro-immi￾gration. Given firms’ important role in LSIP, I examine how their preferences change because of changes in productivity, trade openness, and firm mobility and how policy￾makers respond to these changes. In the United States, a low-skill labor-scarce economy, trade openness, and increases in firm mobility should affect the preferences of firms that are low-skill labor intensive and/or less productive the most, which also are the firms that use the most low-skill immigrant labor. Openness to foreign goods and increasing firm mobility, therefore, may not need to affect the entire economy for them to have an effect on LSIP; instead, they need to affect only low-skill-intensive firms. Low-Skill Immigration Policy Under Autarky To contrast the effects of trade openness and firm mobility, I begin by examining support for LSIP by firms under trade protection and limited opportunities to move abroad (autarky). The goal of firms when they interact with policy-makers is to convince policy-makers to pass policies that decrease their costs and increase their profitability. Firms do not necessarily have a preference over which policy policy-makers choose so they are likely indifferent between LSIP that lowers their labor costs and some other policy that lowers other costs or increases profits. Firms across and within industries differ in their need for low-skill labor; some indus￾tries are more capital and/or high-skill-intensive and some firms within an industry are more productive. The terms low-skill labor intensive and low-productivity are used somewhat interchangeably. In economics, these two aspects of the firms are treated as separate and the effect of trade is modeled differently: differences in the factor intensity of production is modeled by the Ricardo-Viner model and productivity differences are modeled by the Melitz and other similar models.28 In the real world, firms differ on both dimensions—some firms in low-skill labor-intensive industries are more productive than others and some industries are more capital/ high-skill-intensive than others. What is important for this analysis is that these two dimensions collapse when one examines preferences on immigration; henceforth, less-productive and 27. For example, see Gimpel and Edwards 1999; and Hanson, Scheve, and Slaughter 2007. 28. Melitz 2003. Trade, Foreign Direct Investment, and Immigration Policy Making 817