Cartel Recidivism and Innovation Activity in the US

Panagiotis Fotis and Michael Polemis

MPRA Paper from University Library of Munich, Germany

Abstract: In this study, we present the first systematic evidence of the impact of cartel recidivism on innovation. Combining data from an international price-fixing cartel database with the structural characteristics of the US manufacturing sectors at the six-digit NAICS level, we analyze how cartel recidivists influence subsequent innovation outcomes. Using a staggered difference-in-differences (DiD) framework for 110 US cartel cases over the period 1979-2016 and a novel heterogeneous estimator, we find that cartel recidivists lead to a significant and sustained decline in innovation progress. We argue that cartel recidivists, rather than single offenders, drive the negative impact of collusion on innovation. The results of this study are vigorous to several robustness tests, justifying the absence of pretreatment effects and endogeneity.

Keywords: Cartel; Recidivism; Innovation; Antitrust; Difference in Differences (search for similar items in EconPapers)
JEL-codes: D43 K21 L13 (search for similar items in EconPapers)
Date: 2026-02-20
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:128115

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