EFFECTIVE EUROPEAN ANTITRUST: DOES EC MERGER POLICY GENERATE DETERRENCE? |
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| Authors: | Joseph A Clougherty Tomaso Duso Miyu Lee Jo Seldeslachts |
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| Institution: | 1. 1 217 333 6129;2. Associate Professor, Department of Business Administration, University of Illinois at Urbana‐Champaign and CEPR, Champaign, IL;3. +49 30‐89789‐520;4. Associate Professor and Department Head, DIW Berlin and DICE, Heinrich‐Heine University, Berlin, Germany |
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| Abstract: | We estimate the deterrence effects of European Commission (EC) merger policy instruments over the 1990–2009 period. Our empirical results suggest 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, that is, industries where the Herfindahl Hirschman Index is above the 0.2 cut‐off level employed by the EC. Additionally, we find phase‐1 remedies do not deter clearly pro‐competitive mergers, but do deter potentially anti‐competitive mergers in high‐concentration industries. (JEL K21, K40, L40) |
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