Political Power and Market Power

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


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


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.

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