Cycles of Illegality: Antitrust Violations in Corporate America

Abstract

This paper explores the relations between antitrust behavior and variations in macroeconomic conditions and Republican—Democratic administrations. Its major premise is that corporate antitrust criminality results when business conditions deteriorate (i.e., during recessionary periods) and corporate profits are squeezed. This hypothesis is tested using longidutinal data from 1927 through 1981 and OLS time series analysis. Fifty-two "survivor" firms are tracked as to their patterns of antitrust criminality across these sample years. Interpretation of the findings suggests that both economic and political variables are directly related to the criminal behavior of these firms. Antitrust behavior increases as unemployment rates climb and aggregate stock prices drop. It is also apt to occur during Republican administrations. The implications of these findings, as well as how they integrate into the extant literature, are discussed.