Downstream centrality and industry lobbying in production networks

Abstract Which industries lobby the most? I study whether an industry’s position in the production network is associated with reported federal lobbying. The argument is that supplying many downstream customers creates two forces. A policy that helps a supplier can raise privately appropriable stakes when downstream benefits are partly capitalized back to the supplier through derived demand, supplier surplus, contracts, or preservation of customer relationships. The same downstream reach also expands the set of beneficiaries that can free-ride. The model therefore predicts a hump-shaped relationship between downstream reach and focal-industry lobbying. Using a panel of 71 U.S. industries from 1999 to 2023, I find a nonmonotone pattern in mapped LDA lobbying expenditures. The pattern appears in every annual cross-section and is stronger on spending among active industries than on lobbying entry. The estimates are descriptive and apply first to mapped spending. Only about one-third of reported spending maps cleanly to industries, and partial-identification bounds show that inference becomes weaker once the unmapped remainder is taken into account.