The Efficiency of EU Merger Control During the Period 1990–2008

Goran Serdareviæ () and Petr Teply
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Goran Serdareviæ: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic, http://ies.fsv.cuni.cz/
Authors registered in the RePEc Author Service: Goran Serdarević ()

Czech Journal of Economics and Finance (Finance a uver), 2011, vol. 61, issue 3, 252-276

Abstract: The main goal of this paper is to empirically test the function of European merger control in light of the 2004 regulatory reform, which was expected to introduce a more efficient regulatory framework for the assessment of mergers within the EU. We use stock market data to identify cases where there are discrepancies between the European Commission’s decisions compared to market evaluations of the mergers in question. Using the PROBIT model, these cases are further investigated to discover the sources of these discrepancies. In line with previous studies, our results suggest that the discrepancies are caused by procedural and institutional factors. Nevertheless, the regulatory reform introduced in 2004 has, to some extent, enhanced the efficiency of European merger control in the sense that the Commission’s assessments of mergers under the new regulation are more consistent with the market evaluations. We found that the probability of an anti-competitive deal being cleared decreases significantly under the new regulatory framework. Nevertheless, the occurrence of unnecessary remedies has not decreased as the result of the new merger control system. To the authors’ best knowledge, this paper is the first study using stock market data to evaluate the recent reform of European merger control.

Keywords: merger control; European Union; political economy; regulatory reform; PROBIT model (search for similar items in EconPapers)
JEL-codes: C25 D78 K21 L4 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:61:y:2011:i:3:p:252-276

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