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The Anticompetitive Effect of Minority Share Acquisitions: Evidence from the Introduction of National Leniency Programs

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  • Sven Heim

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

  • Kai Hüschelrath

    (University of Applied Sciences Schmalkalden, Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

  • Ulrich Laitenberger

    (IP Paris - Institut Polytechnique de Paris, ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom ParisTech - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, SES - Département Sciences Economiques et Sociales - Télécom ParisTech, Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

  • Yossi Spiegel

    (TAU - Tel Aviv University, Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

Abstract

We address the growing concern that minority shareholding (MS) in rival firms may lessen competition, using the introduction of national leniency programs (LPs) as a shock that destabilizes collusive agreements. Based on data from 63 countries, we find a large and significant immediate increase in domestic horizontal MS acquisitions once an LP is introduced but only in countries where the LP is deemed to be effective. There is no effect on non-horizontal or cross-border MS acquisitions. Our findings suggest that firms may use MS acquisitions to either stabilize collusive agreements or soften competition in the event that collusion breaks down.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Sven Heim & Kai Hüschelrath & Ulrich Laitenberger & Yossi Spiegel, 2022. "The Anticompetitive Effect of Minority Share Acquisitions: Evidence from the Introduction of National Leniency Programs," Post-Print hal-02918873, HAL.
  • Handle: RePEc:hal:journl:hal-02918873
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    Cited by:

    1. Yang, Jianxia & Schmidbauer, Eric & Zhang, Lan, 2023. "Partial cross ownership, exclusive contracting, and market entry," Economics Letters, Elsevier, vol. 226(C).
    2. Rupayan Pal & Emmanuel Petrakis, 2024. "Cross-ownership in duopoly: Are there any incentives to divest?," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2024-003, Indira Gandhi Institute of Development Research, Mumbai, India.
    3. Forsbacka, Tove & Le Coq, Chloé & Marvão, Catarina, 2023. "Cartel birth and death dynamics: Empirical evidence," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    4. Isogai, Shigeki & Shen, Chaohai, 2023. "Multiproduct firm’s reputation and leniency program in multimarket collusion," Economic Modelling, Elsevier, vol. 125(C).
    5. Li, Youping & Zhang, Jianhu & Zhou, Zipeng, 2023. "Vertical differentiation with overlapping ownership," Economics Letters, Elsevier, vol. 222(C).
    6. Jeroen Hinloopen & Sander Onderstal & Adriaan Soetevent, 2023. "Corporate Leniency Programs for Antitrust: Past, Present, and Future," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 111-122, September.
    7. Charistos, Konstantinos & Papadopoulos, Konstantinos G., 2022. "Cartel reporting under passive common ownership," Economics Letters, Elsevier, vol. 216(C).
    8. Lømo, Teis Lunde, 2024. "Overlapping ownership and input prices," International Journal of Industrial Organization, Elsevier, vol. 94(C).

    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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