Antitrust Enforcement Increases Economic Activity

Tania Babina, Simcha Barkai, Jessica Jeffers, Ezra Karger () and Ekaterina Volkova
Additional contact information
Tania Babina: Columbia University [New York]
Simcha Barkai: BC - Boston College
Jessica Jeffers: HEC Paris - Ecole des Hautes Etudes Commerciales
Ekaterina Volkova: University of Melbourne

Working Papers from HAL

Abstract: We hand-collect and standardize information describing all 3,055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries.

Keywords: antitrust enforcement; economic activity; employment; business formation (search for similar items in EconPapers)
Date: 2023-08-01
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Antitrust Enforcement Increases Economic Activity (2024)
Working Paper: Antitrust Enforcement Increases Economic Activity (2023)
Working Paper: Antitrust Enforcement Increases Economic Activity (2023)
Working Paper: Antitrust Enforcement Increases Economic Activity (2023)
Working Paper: Antitrust enforcement increases economic activity (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-04414184

DOI: 10.2139/ssrn.4539741

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().