Working Paper: CEPR ID: DP10959
Authors: Joseph A. Clougherty; Tomaso Duso; Miyu Lee; Jo Seldeslachts
Abstract: We estimate the deterrence effects of European Commission (EC) merger policy instruments over the 1990-2009 period. Our empirical results suggest that phase-1 remedies uniquely generate robust deterrence as ? unlike phase-1 withdrawals, phase-2 remedies, and preventions ? phase-1 remedies lead to fewer merger notifications in subsequent years. Furthermore, the deterrence effects of phase-1 remedies work best in high-concentration industries; i.e., industries where the HHI is above the 0.2 cut-off level employed by the EC. Additionally, we find that phase-1 remedies do not deter clearly pro-competitive mergers, but do deter potentially anti-competitive mergers in high-concentration industries.
Keywords: competition policy; deterrence; European Commission; merger policy
JEL Codes: K21; K40; L40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| phase 1 remedies (Y20) | fewer merger notifications (L49) |
| phase 1 remedies (Y20) | fewer merger notifications in high concentration industries (L49) |
| phase 1 remedies (Y20) | deterrence of potentially anticompetitive mergers (K21) |
| phase 1 withdrawals (Y20) | fewer merger notifications (L49) |
| phase 2 actions (Y50) | fewer merger notifications (L49) |