EFFECTIVE EUROPEAN ANTITRUST: DOES EC MERGER POLICY GENERATE DETERRENCE?

Joseph A. Clougherty; Tomaso Duso; Miyu Lee; Jo Seldeslachts

doi:10.1111/ecin.12346

EFFECTIVE EUROPEAN ANTITRUST: DOES EC MERGER POLICY GENERATE DETERRENCE?

Joseph A. Clougherty, Tomaso Duso, Miyu Lee, Jo Seldeslachts

Research output: Contribution to journal › Article › peer-review

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).

Original language	English (US)
Pages (from-to)	1884-1903
Number of pages	20
Journal	Economic Inquiry
Volume	54
Issue number	4
DOIs	https://doi.org/10.1111/ecin.12346
State	Published - Oct 1 2016

ASJC Scopus subject areas

General Business, Management and Accounting
Economics and Econometrics

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10.1111/ecin.12346

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title = "EFFECTIVE EUROPEAN ANTITRUST: DOES EC MERGER POLICY GENERATE DETERRENCE?",

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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AB - 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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EFFECTIVE EUROPEAN ANTITRUST: DOES EC MERGER POLICY GENERATE DETERRENCE?

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