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What determines horizontal merger antitrust case selection?

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  • Gao, Ning
  • Peng, Ni
  • Strong, Norman

Abstract

U.S. antitrust agencies claim their antitrust enforcement mission is to protect consumers, promote fair competition, and maintain efficiency. Are antitrust practices consistent with this claim? We explore this question by examining antitrust selection of horizontal merger cases in the U.S. manufacturing sector during 1980–2009. We find that antitrust agencies are more likely to intervene when foreign import pressure is low, merger industry concentration hits a hurdle level, or local or less specialized rivals suffer unfavorable wealth effects. We find no evidence that antitrust agencies systematically respond to the wealth effects of either customers in general or more affected customers. Our findings can be a useful reference for calibrating the efficiency of antitrust regulation and enforcement.

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  • Gao, Ning & Peng, Ni & Strong, Norman, 2017. "What determines horizontal merger antitrust case selection?," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 51-76.
    • Handle: RePEc:eee:corfin:v:46:y:2017:i:c:p:51-76
    DOI: 10.1016/j.jcorpfin.2017.06.007
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    Cited by:

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    2. Kim, Incheol & Lee, Suin & Sharma, Bina, 2023. "Competition law reform and firm performance: Evidence from developing countries," Emerging Markets Review, Elsevier, vol. 56(C).
    3. Frederick Davis & Svetlana Davis & Xiaoyang Sha & Thomas Walker, 2022. "The impact of takeover anticipation on rival firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 49(7-8), pages 1264-1288, July.

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    More about this item

    Keywords

    Horizontal merger; Antitrust efficiency; Case selection;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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