A Political Economy Model of Merger Policy in International Markets
AbstractThis paper looks at the political economy of merger policy under autarky and in international markets. We assume that merger policy is decided by antitrust authorities (whose objective is to maximize welfare) but can be influenced by governments, which are subject to lobbying by the firms (be they insiders or outsiders to the merger). We argue that political economy distortions may explain some of the recently observed merger policy conflicts between authorities and politicians, as well as between institutions belonging to different countries. We illustrate our analysis with applications motivated by recent merger cases, which have been widely debated in the international press.
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Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 79 (2012)
Issue (Month): 313 (01)
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Other versions of this item:
- Motta, Massimo & Ruta, Michele, 2008. "A Political Economy Model of Merger Policy in International Markets," CEPR Discussion Papers 6894, C.E.P.R. Discussion Papers.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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