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Efficiency of EU Merger Control in the 1990-2008 Period

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Abstract

The main goal of this paper is to provide an analysis of key regulatory changes in the European merger control and to evaluate their real impact on the efficiency of merger regulation. Our main contribution is an empirical analysis of a unique representative sample of 161 horizontal mergers covering the final regulatory assessments during the period from 1990 to 2008. We use stock market data to identify those cases where there are discrepancies between the Commission and market evaluation of the merger. The PROBIT model is then used to further investigate the sources of these discrepancies. Our results suggest that the Commission’s decisions are not purely explained by the motive of protecting consumer welfare and that other political and institutional factors do play a role in setting policy. We did not find evidence that the Commission protects competitors at the expense of consumers and foreign firms. Moreover, we conclude that the regulatory reform introduced in 2004 has significantly enhanced efficiency of the European merger control. To the authors’ best knowledge, this paper is the first study using stock market data to evaluate an impact of the recent EU merger control.

Suggested Citation

  • Goran Serdarevic & Petr Teply, 2009. "Efficiency of EU Merger Control in the 1990-2008 Period," Working Papers IES 2009/28, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2009.
    • Handle: RePEc:fau:wpaper:wp2009_28
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    File URL: http://ies.fsv.cuni.cz/default/file/download/id/13511
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    More about this item

    Keywords

    merger control; European Union; political economy; regulatory reform; PROBIT model;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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