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Equitable Growth supports research and policy analysis on how strong competition among U.S. businesses affects inequality and broad-based economic growth. More
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Equitable Growth supports research and policy analysis on how trends in economic inequality and mobility and changes in the economy have affected the concentration of wealth, income, and earnings, and how these distributional shifts have affected the promise of economic security and opportunity. More
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Equitable Growth supports research and policy analysis on how inequalities in wages, bargaining power, and the evolving labor market affect workers’ economic security and opportunity as well as broad-based economic growth. More
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Political Power and Market Power

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011223-WP-Political Power and Market Power-Cowgill Prat and Tommaso

Authors:

Bo Cowgill, Columbia University
Andrea Prat, Columbia University
Tommaso Valletti, Imperial College London

Abstract:

We study the link between political influence and industrial concentration. A model of an oligopoly that engages in lobbying shows that a merger may lead to an increase or a decrease in political influence activity. We combine data on mergers with data on lobbying expenditures and campaign contributions in the US from 1999 to 2017. We document a positive association between mergers and lobbying and we find some evidence for a positive association with contributions.