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European M&A Regulation is Protectionist

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Author Info
Nihat Aktas (Université catholique de Louvain)
Eric Bodt (Université de Lille 2-Esa)
Richard Roll (Anderson Graduate School of Management)
Abstract

Why do regulatory authorities scrutinize mergers and acquisitions? The authorities themselves claim to be combating monopoly power and protecting consumers, but the last two decades of empirical research has found little supporting evidence for such laudatory motives. An alternative is that M&A regulation is actually designed to protect privileged firms. In this paper, we provide a test of protectionism by studying whether European regulatory intervention is more likely when European firms are harmed by increased competition. Our findings are unambiguous: European regulation is protectionist. The results are robust to a variety of statistical difficulties, including endogeneity between investor valuations and regulatory actions.

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Paper provided by Anderson Graduate School of Management, UCLA in its series University of California at Los Angeles, Anderson Graduate School of Management with number 1252.

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Date of creation: 06 Mar 2004
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Handle: RePEc:cdl:anderf:1252

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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    Other versions:
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  1. Tomaso Duso & Klaus Gugler & Burcin Yurtoglu, 2006. "EU Merger Remedies: A Preliminary Empirical Assessment," Discussion Papers 81, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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  2. Ivaldi, Marc & Motis, Jrissy, 2007. "Mergers as Auctions," CEPR Discussion Papers 6434, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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