The large increase in common institutional ownership has raised legitimate antitrust concerns. While the exact channel by which common institutional shareholders might influence firm policy remains unclear, a prominent potential mechanism is corporate board representation. Using hand-collected data on shareholders' board representation, we show that instances of institutional investors simultaneously holding board positions in rival companies are exceedingly rare and do not account for the positive correlation between common institutional ownership and firm-pair profitability. Our findings suggest that board representation by institutional investors is unlikely to represent an empirically potent channel of influence on corporate policy.

We document an increase in market power for politically active firms during times of heightened policy uncertainty, when their information and influence advantage is greater. The effect is long-lasting and stronger for large politically active firms. We show that relatively large investments during high uncertainty periods serve as a potential mechanism for gains in market power. Industries populated with politically active firms experience lower business dynamism and import penetration, consistent with active firms leveraging investment timing to restrict competition. Results suggest that political activism is a likely contributing factor to the dominance of large firms over the last two decades.