HOW DOES A CORPORATE LENIENCY PROGRAM AFFECT CARTEL STABILITY? EMPIRICAL EVIDENCE FROM KOREA

Yun Jeong Choi and Kyoung Soo Hahn

Journal of Competition Law and Economics, 2014, vol. 10, issue 4, 883-907

Abstract: This article examines the impact of Korea's corporate leniency program on cartel stability by applying a semi-parametric hazard model to a unique data set of 619 discovered cartels. We find that, in the short run, the introduction and revision of leniency reduced a cartel dissolution rate and resulted in longer cartel duration. However, in the long run, the introduction of leniency increases the cartel dissolution rate and decreases cartel duration. As a consequence of the leniency program, the Korea Fair Trade Commission's enforcement on cartels has become more effective. These results provide empirical evidence of the effectiveness of full leniency with respect to the first applicant and also have some policy implications for the revision of the leniency program.

JEL-codes: K21 L12 L44 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:10:y:2014:i:4:p:883-907.

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Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

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