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The Determinants of Cartel Duration in Korea

Author

Listed:
  • Robert M. Feinberg

    (American University)

  • Hyunchul Kim

    (Sungkyunkwan University)

  • Minsoo Park

    (Sungkyunkwan University
    CERK)

Abstract

This paper analyzes a database of Korean Fair Trade Commission anti-cartel cases from 1989 through 2013 to explain determinants of reported cartel duration. These are all formal (rather than tacit) cartels, with start and end dates as determined by the KFTC; furthermore, our analysis does not address the question of frequency of cartel attempts. Nevertheless, we find that the expected fine imposed, normalized by number of firms and cartel duration, seems to be viewed ex ante as a cost of collusion—limiting duration—while foreign company involvement in cartels generally has promoted greater cartel stability (though perhaps less so in recent years). We also find that a larger number of participating firms generally limits cartel stability, though the statistical significance of this finding is not completely robust to specification choices. While not our primary focus, leniency/amnesty programs have generally expected effects on cartel stability.

Suggested Citation

  • Robert M. Feinberg & Hyunchul Kim & Minsoo Park, 2016. "The Determinants of Cartel Duration in Korea," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 433-448, June.
    • Handle: RePEc:kap:revind:v:48:y:2016:i:4:d:10.1007_s11151-016-9505-4
    DOI: 10.1007/s11151-016-9505-4
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    References listed on IDEAS

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    3. Peter T. Dijkstra & Jonathan Frisch, 2018. "Sanctions and Leniency to Individuals, and its Impact on Cartel Discoveries: Evidence from the Netherlands," De Economist, Springer, vol. 166(1), pages 111-134, March.

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