The Effect of EU Antitrust Investigations and Fines on a Firm?s Valuation

Massimo Motta () and Gregor Langus ()

No 6176, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We estimate, using event study techniques, the impact of the main events in an antitrust investigation on a firm?s stock market value. A surprise inspection at the firm?s premises has a strong and statistically significant effect on the firm?s share price, with its cumulative average abnormal return being approximately -2%. Further, we find that a negative Decision by the European Commission results in a cumulative average abnormal return of about -3.3%. Overall, the fine accounts for a relatively small fraction of this loss in value. Finally, if the Court annuls or reduces the fine, this has a positive (+2%) effect on the firm?s valuation.

Keywords: Antitrust; Deterrence; Event studies; Fines (search for similar items in EconPapers)
JEL-codes: K21 K42 L4 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-bec, nep-com and nep-law
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Citations: View citations in EconPapers (2)

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Journal Article: The Effect of EU Antitrust Investigations and Fines on a Firm's Valuation (2013)
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