Mariya Sakharova

Different social classes have different tools at their disposal, such as political influence and collusion, which in turn influence the market structure of an economy. While the effects of political influence have been studied, the prevalence and associated outcomes of collusion are unclear, since collusion is usually illegal and thus difficult to measure. I collect a novel dataset on collusion in Late Tsarist Russia and use classic and staggered differences-in-differences to study the relationship between elites, foreign entities, merchants and collusion, and how collusion may affect industrialization. Industries with elite presence are not necessarily more collusive. However when there is a contraction in demand these industries see an increase in collusion, especially when they face foreign competition. Colluding firms within the metals sector see their machine power increase, indicating collusion gave them more financial leeway to mechanize in an environment with underdeveloped financial markets - implying that in such a setting collusion was beneficial for industrialization.