An empirical analysis of Mexican merger policy
AbstractA newly created dataset including 239 decisions made by the Mexican Federal Competition Commission on horizontal mergers between 1997 and 2001 is used to estimate the different factors affecting the Commission's resolution. The paper approximates the decision making process using two different discrete choice models. The results indicate that, contrary to the Commission's objective, the presence of efficiency gains increases the probability of a case being issued. The findings also show that factors different from the ones explicitly mentioned by the Commission have a significant effect on the Commission's final decision. In particular, the presence of a foreign company among the would-be merger firms significantly increases the likelihood of observing an allowed merger.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4527.
Date of creation: 01 Feb 2008
Date of revision:
Microfinance; Economic Theory&Research; Labor Policies; Bankruptcy and Resolution of Financial Distress; Corporate Law;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-01 (All new papers)
- NEP-COM-2008-03-01 (Industrial Competition)
- NEP-DCM-2008-03-01 (Discrete Choice Models)
- NEP-DEV-2008-03-01 (Development)
- NEP-IND-2008-03-01 (Industrial Organization)
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