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The Impact of Conviction for Anti‐Competitive Practices on Firm Valuation: A Contingency Approach
Author(s) -
Le Roy Frédéric,
Sentis Patrick,
Jerson Ariste
Publication year - 2017
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2801
Subject(s) - conviction , contingency , valuation (finance) , contingency table , business , diversification (marketing strategy) , sample (material) , event study , economics , actuarial science , marketing , accounting , statistics , mathematics , political science , biology , paleontology , philosophy , linguistics , chemistry , context (archaeology) , chromatography , law
The previous research on the impact of anti‐competitive practices on firm valuation has shown conflicting results. To explain these conflicting results, we introduce three contingency factors: the amount of the fine, the degree of company involvement, and the company size. To test the impact of these factors, an event study is conducted on a sample of 305 confirmed cases in Europe between 1998 and 2007. The results show that the impact of conviction for anti‐competitive practice is greater when the relative amount of the fine is high, the company's degree of involvement is high, and the company is small. Copyright © 2016 John Wiley & Sons, Ltd.