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Remedy for Now but Prohibit for Tomorrow: The Deterrence Effects of Merger Policy Tools

Jo Seldeslachts (), Joseph Clougherty () and Pedro Barros ()

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

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.

JEL-codes: L40 L49 K21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-law and nep-reg
Date: 2007-09
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Working Paper: Remedy for Now but Prohibit for Tomorrow: The Deterrence Effects of Merger Policy Tools (2007) Downloads
Working Paper: Remedy for Now but Prohibit for Tomorrow: The Deterrence Effects of Merger Policy Tools (2007) Downloads
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Persistent link: http://EconPapers.repec.org/RePEc:trf:wpaper:218

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