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European M&A Regulation is Protectionist

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

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.

Suggested Citation

  • Aktas, Nihat & Bodt, Eric de & Roll, Richard, 2004. "European M&A Regulation is Protectionist," University of California at Los Angeles, Anderson Graduate School of Management qt9gd3x41d, Anderson Graduate School of Management, UCLA.
  • Handle: RePEc:cdl:anderf:qt9gd3x41d
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    Cited by:

    1. Tomaso Duso & Klaus Gugler & Burcin Yurtoglu, 2005. "EU Merger Remedies: A Preliminary Empirical Assessment," CIG Working Papers SP II 2005-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    2. Ivaldi, Marc & Motis, Jrissy, 2007. "Mergers as Auctions," IDEI Working Papers 461, Institut d'Économie Industrielle (IDEI), Toulouse.

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