Endogenous choice of minority shareholdings: Effects on product market competition

Samuel de Haas ()
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Samuel de Haas: Justus-Liebig-University Giessen

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Non-controlling minority shareholdings in rivals (NCMS) lower the sustainability of collusion under a wide variety of circumstances. Nevertheless, NCMS are sometimes deemed to facilitate collusion, in particular if the level of NCMS is exogenous. The present paper endogenizes firms' choice of NCMS and answers the question: Would colluding firms find it rational to acquire NCMS in rivals? The study of the acquisition reveals that firms have an incentive to acquire NCMS which are accompanied by a shift from collusive to competitive behaviour.

Keywords: Collusion; Coordinated Effects; Minority Shareholdings; Merger Control; Unilateral Effects (search for similar items in EconPapers)
JEL-codes: G34 K21 L41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2019
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201912

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