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ANTITRUST POLICY AND MERGERS: THE WEALTH EFFECT OF SUPREME COURT DECISIONS
Author(s) -
MCWILLIAMS ABAGAIL,
TURK THOMAS A.,
ZARDKOOHI ASGHAR
Publication year - 1993
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/j.1465-7295.1993.tb00888.x
Subject(s) - supreme court , enforcement , economics , event study , value (mathematics) , law , law and economics , business , political science , context (archaeology) , paleontology , machine learning , computer science , biology
Many believe that antitrust policy has had a dramatic impact on merger strategies in the United States. For this to be true, enforcement of antitrust laws must affect a wide range of firms, not just those firms whose mergers are contested. This study tests whether or not firms engaged in uncontested mergers are affected by antitrust enforcement, as signalled by Supreme Court decisions. Using event study methodology, we find that antitrust policy against mergers was binding during the 1960s and 1970s as it ulowered the value of targets in ucontested ongoing mergers.