Greening in Groups: Firm Concentration and Lobbying on Green Industrial Policy

Abstract: Productivity is key to the economic and political behavior of firms. Green industrial policy is an increasingly common intervention to improve domestic firms’ green productivity. Whereas existing explanations of firm political behavior take productivity as given, I argue that inter-firm geographic concentration provides insights into how firms have reacted to this increasing green interventionism to shape future productivity. Concentrated firms receive more proximate policy benefits, those that cannot be limited to a single firm but are shared among neighbors. Expansions to green industrial assistance funding enable transformational decarbonization innovations, such as infrastructure projects, laden with proximate benefits, leading concentrated firms to lobby more during implementation. Using French lobbying data, I assess how manufacturing firms responded to an expansion of green assistance in the COVID-19 stimulus package: France Relance. Using this exogenous funding shock in a difference-in-differences design, I find that more concentrated firms increasingly lobby on green industrial policy. This holds when I consider intra-industry trends, suggesting concentrated firms lobby alongside their sector associations. Qualitative evidence of policy developments provide further evidence of a geographic cleavage shaping the politics of industrial decarbonization.

Recommended citation: Pike, Ryan. (2025). Greening in Groups: Firm Concentration and Lobbying on Green Industrial Policy. Working Paper.
Download Paper