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How Does A Corporate Leniency Program Affect Cartel Stability? Empirical Evidence From Korea

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  • Yun Jeong Choi
  • Kyoung Soo Hahn

Abstract

This article examines the impact of Korea's corporate leniency program on cartel stability by applying a semi-parametric hazard model to a unique data set of 619 discovered cartels. We find that, in the short run, the introduction and revision of leniency reduced a cartel dissolution rate and resulted in longer cartel duration. However, in the long run, the introduction of leniency increases the cartel dissolution rate and decreases cartel duration. As a consequence of the leniency program, the Korea Fair Trade Commission's enforcement on cartels has become more effective. These results provide empirical evidence of the effectiveness of full leniency with respect to the first applicant and also have some policy implications for the revision of the leniency program.

Suggested Citation

  • Yun Jeong Choi & Kyoung Soo Hahn, 2014. "How Does A Corporate Leniency Program Affect Cartel Stability? Empirical Evidence From Korea," Journal of Competition Law and Economics, Oxford University Press, vol. 10(4), pages 883-907.
    • Handle: RePEc:oup:jcomle:v:10:y:2014:i:4:p:883-907.
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    File URL: http://hdl.handle.net/10.1093/joclec/nhu026
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    Citations

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    Cited by:

    1. Moohyung Cho & Tim Büthe, 2021. "From rule‐taker to rule‐promoting regulatory state: South Korea in the nearly‐global competition regime," Regulation & Governance, John Wiley & Sons, vol. 15(3), pages 513-543, July.
    2. Xue Jin & Ussif Rashid Sumaila & Kedong Yin & Zhichao Qi, 2021. "Evaluation of the Policy Effect of China’s Environmental Interview System for Effective Air Quality Governance," IJERPH, MDPI, vol. 18(17), pages 1-20, August.
    3. Lucas Campio Pinha & Marcelo José Braga, 2019. "Evaluating the effectiveness of the Brazilian Leniency Program," Economics Bulletin, AccessEcon, vol. 39(3), pages 1860-1869.
    4. Joan-Ramon Borrell & Carmen García & Juan Luis Jiménez & José Manuel Ordóñez-de-Haro, 2022. ""Cartel destabilization effect of leniency programs"," IREA Working Papers 202213, University of Barcelona, Research Institute of Applied Economics, revised Sep 2022.
    5. Robert M. Feinberg & Hyunchul Kim & Minsoo Park, 2016. "The Determinants of Cartel Duration in Korea," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 433-448, June.

    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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