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EFFECTIVE EUROPEAN ANTITRUST: DOES EC MERGER POLICY GENERATE DETERRENCE?
Author(s) -
Clougherty Joseph A.,
Duso Tomaso,
Lee Miyu,
Seldeslachts Jo
Publication year - 2016
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12346
Subject(s) - deterrence theory , european commission , herfindahl index , deterrence (psychology) , commission , index (typography) , economics , phase (matter) , merger control , business , international economics , international trade , law and economics , european union , law , microeconomics , political science , finance , chemistry , organic chemistry , world wide web , computer science
We estimate the deterrence effects of European Commission (EC) merger policy instruments over the 1990–2009 period. Our empirical results suggest phase‐1 remedies uniquely generate robust deterrence as—unlike phase‐1 withdrawals, phase‐2 remedies, and preventions—phase‐1 remedies lead to fewer merger notifications in subsequent years. Furthermore, the deterrence effects of phase‐1 remedies work best in high‐concentration industries, that is, industries where the Herfindahl Hirschman Index is above the 0.2 cut‐off level employed by the EC. Additionally, we find phase‐1 remedies do not deter clearly pro‐competitive mergers, but do deter potentially anti‐competitive mergers in high‐concentration industries. ( JEL K21, K40, L40)