Working Paper: CEPR ID: DP6437
Authors: Jo Seldeslachts; Joseph A. Clougherty; Pedro Pita Barros
Abstract: Antitrust policy involves not just the regulation of anti-competitive behavior, but also an important deterrence effect. Neither scholars nor policymakers have fully researched the deterrence effects of merger policy tools, as they have been unable to empirically measure these effects. We consider the ability of different antitrust actions ? Prohibitions, Remedies, and Monitorings ? to deter firms from engaging in mergers. We employ cross-jurisdiction/pan-time data on merger policy to empirically estimate the impact of antitrust actions on future merger frequencies. We find merger prohibitions to lead to decreased merger notifications in subsequent periods, and remedies to weakly increase future merger notifications: in other words, prohibitions involve a deterrence effect but remedies do not.
Keywords: antitrust; deterrence; merger policy; remedies
JEL Codes: K21; L40; L49
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Merger prohibitions (L41) | Future merger notifications (G34) |
| Remedies (K41) | Future merger notifications (G34) |
| Monitorings (E50) | Future merger behavior (G34) |