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European M&A Regulation is Protectionist

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  • Aktas, Nihat
  • Bodt, Eric de
  • Roll, Richard
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    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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    Bibliographic Info

    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 qt9gd3x41d.

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    Date of creation: 06 Mar 2004
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    Handle: RePEc:cdl:anderf:qt9gd3x41d

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    References

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    9. Damien Neven, 2002. "Discrepancies Between Markets and Regulators: an Analysis of the First ten Years of EU Merger Control," IHEID Working Papers 10-2002, Economics Section, The Graduate Institute of International Studies.
    10. Nihat Aktas & Eric de Bodt & Michel Levasseur & André Schmitt, 2001. "The Emerging Role of the European Commission in Merger and Acquisition Monitoring: The Boeing-McDonnell Douglas Case," European Financial Management, European Financial Management Association, vol. 7(4), pages 447-480.
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    Cited by:
    1. Ivaldi, Marc & Motis, Jrissy, 2007. "Mergers as Auctions," CEPR Discussion Papers 6434, C.E.P.R. Discussion Papers.
    2. Duso, Tomaso & Gugler, Klaus & Yurtoglu, Burcin B., 2006. "EU Merger Remedies: A Preliminary Empirical Assessment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 81, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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