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When do firms leave cartels? Determinants and the impact on cartel survival

Michael Hellwig () and Kai Hüschelrath
Authors registered in the RePEc Author Service: Kai Hueschelrath

No 17-002, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We use a dataset of 615 firms which participated in 114 illegal cartels - convicted by the European Commission between 1999 and 2016 - to investigate the determinants of the duration of a firm's participation in a cartel. Applying a Weibull proportional hazard model with a particular focus on the impact of internal and external time-varying determinants, we find that firms show an increased probability to leave a cartel if prior exits occurred as well as in periods of high demand growth. However, we find a reduced exit probability in situations of prior entries to the cartel or in periods of high interest rates. Additional estimations on the cartel level further suggest that firm exits increase the probability of a cartel breakdown substantially.

Keywords: Survival Analysis; Cartels; Duration; European Union (search for similar items in EconPapers)
JEL-codes: C41 K21 L41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-law
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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https://www.econstor.eu/bitstream/10419/148923/1/876457243.pdf (application/pdf)

Related works:
Journal Article: WHEN DO FIRMS LEAVE CARTELS? DETERMINANTS AND THE IMPACT ON CARTEL SURVIVAL (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:17002

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