Bo Cowgill, Andrea Prat, Tommaso Valletti, 16 May 2022

Industry concentration leads to increased market power, but can it also lead to increased political power? This question, first asked by Brandeis in 1914, is receiving renewed attention. This column investigates the effect of a merger on the amount of political activity of the merging firms. While theoretical predictions are ambiguous, US data from the past 20 years indicate that the average merger involving listed companies is associated with a 30% increase in lobbying spending. 

Alessandra Bonfiglioli, Rosario Crinò, Gino Gancia, 08 May 2019

Recent studies documenting the increase of industrial concentration have raised concerns about an era of monopolies, growing profit shares, and low economic dynamism. Using US data, this column investigates the concentration of import sales by country of origin. The results show that among foreign firms selling to the US, the concentration of sales has remained stable by origin country, but it has fallen when pooling firms from all origins. This suggests that intensified competition in international markets coexists with growing concentration among national producers.

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