Working Paper: CEPR ID: DP6349
Authors: Paolo Buccirossi; Giancarlo Spagnolo
Abstract: This chapter examines the relationship between corporate governance and competition, particularly with regard to cartel formation, and discusses how corporate governance and firm agency problems affect optimal law enforcement against cartels, both in terms of sanctions and leniency policies. Many of the conclusions appear applicable, with minor changes, to non-antitrust forms of collusion, such as collusion between auditors and management, and more generally to corporate and organized crime.
Keywords: amnesty; antitrust; cartels; CEO compensation; collusion; corporate crime; corporate fraud; corporate governance; corporate liability; corruption; deterrence; employee liability; fines; immunity; imprisonment; indemnification; judgment proofness; leniency; managerial incentives; optimal sanctions; rewards; whistleblowers
JEL Codes: G30; K00; L20; L40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Corporate governance factors (G38) | likelihood of cartel formation (L12) |
| Managerial incentives (M52) | collusive behavior (D70) |
| Capped bonuses (J33) | sustain collusion (D74) |
| Corporate governance structures (G38) | facilitate collusion (L12) |
| Antitrust law enforcement (K21) | effectiveness of sanctions and leniency policies (K21) |
| Corporate governance dynamics (G38) | effectiveness of antitrust law enforcement (K21) |
| Enhancing corporate governance (G38) | reduce incidence of collusion (K21) |