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Political Discretion and Antitrust Policy: Evidence from the Assassination of President McKinley

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  • Richard B. Baker
  • Carola Frydman
  • Eric Hilt

Abstract

We analyze the response of asset prices to the assassination of President William McKinley in 1901. During his term in office, the largest wave of merger activity in American history occurred, yet McKinley did not attempt to enforce the Sherman Act against the firms. By contrast, his vice president, Theodore Roosevelt, was known to be interested in restraining corporate combinations. We find that firms that had engaged in mergers saw greater declines in their abnormal returns following McKinley’s assassination. We also study the market’s response to the first antitrust suit initiated by Roosevelt once he took office and find similar patterns, which confirms the importance of antitrust enforcement in the response of asset prices. Roosevelt’s accession caused a significant change in the approach to antitrust, not from new legislation but from more aggressive enforcement of existing law.

Suggested Citation

  • Richard B. Baker & Carola Frydman & Eric Hilt, 2023. "Political Discretion and Antitrust Policy: Evidence from the Assassination of President McKinley," Journal of Law and Economics, University of Chicago Press, vol. 66(4), pages 837-873.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/725590
    DOI: 10.1086/725590
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    Cited by:

    1. Mariotti, Sergio & Marzano, Riccardo, 2021. "The effects of competition policy, regulatory quality and trust on inward FDI in host countries," International Business Review, Elsevier, vol. 30(6).
    2. Arai Koki, 2025. "Comparative Impacts of Ex-Ante and Ex-Post Regulation in Digital Markets: An Event Study Analysis of Stock Price Reactions," Asian Journal of Law and Economics, De Gruyter, vol. 16(2), pages 283-305.

    More about this item

    JEL classification:

    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
    • N41 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: Pre-1913
    • N81 - Economic History - - Micro-Business History - - - U.S.; Canada: Pre-1913

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