Market Conduct and Endogenous Lobbying: Evidence from the U.S. Mobile Telecommunications Industry

Duso, Tomaso; Jung, Astrid

doi:10.2139/ssrn.467341

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Market Conduct and Endogenous Lobbying: Evidence from the U.S. Mobile Telecommunications Industry

WZB Discussion Paper No. FS IV 02-35

31 Pages Posted: 13 Nov 2003

See all articles by Tomaso Duso

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization; Centre for Economic Policy Research (CEPR)

Astrid Jung

WZB Berlin Social Science Center

Date Written: October 2003

Abstract

This paper empirically explores the relationship between firms' market behavior and their lobbying activities in a regulated market. In particular, we investigate whether the amount of contributions offered by cellular service providers to fund the campaigns of political parties affected market conduct in the early US mobile telecommunications industry. We structurally estimate market interactions while taking the potential endogeneity of lobbying decisions into account. Our results show that competition was more intense in those states where campaign contributions by the cellular industry have been higher. Furthermore, we reject the hypothesis that lobbying activities can be regarded as exogenous in the study of market conduct.

Keywords: Lobbying, Campaign Contributions, Conjectural Variations, Mobile Telecommunications, U.S.

JEL Classification: D72, L13, L51, L96, C31

Suggested Citation: Suggested Citation

Duso, Tomaso and Jung, Astrid, Market Conduct and Endogenous Lobbying: Evidence from the U.S. Mobile Telecommunications Industry (October 2003). WZB Discussion Paper No. FS IV 02-35, Available at SSRN: https://ssrn.com/abstract=467341 or http://dx.doi.org/10.2139/ssrn.467341