Political Power and Market Power

58 Pages Posted: 27 May 2022

See all articles by Bo Cowgill

Bo Cowgill

Columbia University - Columbia Business School

Andrea Prat

Columbia University - Columbia Business School, Finance; Centre for Economic Policy Research (CEPR)

Tommaso M. Valletti

Imperial College Business School; Centre for Economic Policy Research (CEPR)

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Date Written: April 2022

Abstract

We study the link between political influence and industrial concentration. A model of firm lobbying shows that concentration and regulation may be either strategic complements or substitutes. Using data for the past 20 years in the US, we study whether merging firms' influence activity increases or decreases after a merger. We document an increase in lobbying activity and we find some evidence for an increase in campaign contributions.

Suggested Citation

Cowgill, Bo and Prat, Andrea and Valletti, Tommaso M., Political Power and Market Power (April 2022). CEPR Discussion Paper No. DP17178, Available at SSRN: https://ssrn.com/abstract=4121353

Bo Cowgill (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Andrea Prat

Columbia University - Columbia Business School, Finance ( email )

3022 Broadway
New York, NY 10027
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Tommaso M. Valletti

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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