Working Paper: CEPR ID: DP6894
Authors: Massimo Motta; Michele Ruta
Abstract: This paper looks at the political economy of merger policy under autarky and in international markets. We assume that merger policy is decided by antitrust authorities (whose objective is to maximize welfare) but can be influenced by governments, which are subject to lobbying by the firms (be they insiders or outsiders to the merger). We argue that political economy distortions may explain some of the recently observed merger policy conflicts between authorities and politicians, as well as between institutions belonging to different countries. We illustrate our analysis with applications motivated by recent merger cases, which have been widely debated in the international press.
Keywords: Antitrust Policy; European Union; Lobbying; Mergers
JEL Codes: D72; F59; H11; L40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lobbying (D72) | government decisions regarding merger approvals (L49) |
| government decisions regarding merger approvals (L49) | potential conflicts with antitrust authorities (L49) |
| government endorsement of mergers (G34) | antitrust authorities opposing mergers (L41) |
| differences in national interests and lobbying (F52) | divergent merger policies (L49) |