Papers presented by Anne Schaller since 2019

2025 Atlanta, Georgia

"Procompetitive Effects of State Antitrust Laws: Evidence from the Progressive Era"

Abstract:

Between 1888 and 1940, 39 states enacted antitrust statutes, but little is known about how these measures affected the economies of the states that enacted them. Antitrust laws restrict firms’ ability to monopolize an industry or collude with each other and are designed to protect competition. In turn, competition among firms can create benefits for consumers, such as downward pressure on prices and incentives for firms to maintain product quality. I estimate the long-term effects of state antitrust statutes on manufacturing outcomes using county-by-industry tabulations from historical censuses of manufactures. Using difference-in-differences and event study models that account for the staggered nature of treatment timing, I find that the enactment of state antitrust laws decreased average profits in the manufacturing sector by about 13 percent, a result that is consistent with a shift to more competitive markets. I also find suggestive evidence that the enactment of state antitrust laws increased the number of manufacturing establishments by about 24 percent in the half century following enactment. Moreover, by using historical newspaper data to proxy for enforcement of state antitrust laws, I show that these effects were likely driven by high-enforcement states. I also show that in cases where a state antitrust law was repealed by a legislative act or overturned by a court ruling, effects went in the opposite direction—profits increased and the number of manufacturing establishments decreased. I find no evidence that state antitrust laws affected productivity within the manufacturing sector. These results provide historical evidence that antitrust policy can be an effective means of promoting competition in the U.S. economy and imply that enforcement played an important role in steering markets towards competitive equilibria.

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