Bo Cowgill (Columbia University); Andrea Prat (Columbia University); Tomasso Valletti (Imperial College Business School)
Economics / Institutions and organizations in political economy
Abstract
We study the link between political influence and industrial concentration. A model of firm lobbying shows that concentration and regulation may be either complements or substitutes. Using data for the past 20 years in the US, we show how lobbying increases when an industry becomes more concentrated, using mergers as shocks to concentration. This holds true both for expenditures on federal lobbying as well as expenditures on campaign contributions.