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The Consistency of Merger Decisions in a Developing Country: The South African Competition Commission

  • Richard J. Grimbeek

    ()

    (Department of Economics, University of Pretoria)

  • Sunel Grimbeek

    ()

    (Department of Economics, University of Pretoria)

  • Steven F. Koch

    ()

    (Department of Economics, University of Pretoria)

Merger decisions made by the South African Competition Commission from April 2002 to March 2010 are analyzed to empirically identify the factors, which have historically in uenced prohibition, conditional approval and unconditional approval. The key explanatory variables are linked to provisions of the 1998 Competition Act, as well as the timing of merger noti cations, such that the analysis provides insight into the consistency of merger decisions with respect to the legal requirements speci ed in the Act. Although the legislation includes standard economic concerns, it also includes a provision for advancing public interests and development concerns. Initial results point to di ering behaviour over the time period, which suggests that the Commission is inconsistent; however, the majority of those inconsistencies are removed, once additional measures of market contestibility are included in the analysis. The nal results suggest that the Commission is less likely to approve mergers that they link to markets that are less contestable. Furthermore, in addition to protecting competition, the Commission is simultaneously protecting other public interests. Therefore, our research supports the hypothesis that the Commission consistantly applies its legislative remit.

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Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 201117.

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Length: 32 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:pre:wpaper:201117
Contact details of provider: Postal: PRETORIA, 0002
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Fax: (+2712) 362-5207
Web page: http://www.up.ac.za/economics

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  1. Bergman, Mats A. & Jakobsson, Maria & Razo, Carlos, 2003. "An Econometric Analysis of the European Commission's Merger Decisions," Working Paper Series 2003:6, Uppsala University, Department of Economics.
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  14. Damien Neven, 2002. "Discrepancies Between Markets and Regulators: an Analysis of the First ten Years of EU Merger Control," IHEID Working Papers 10-2002, Economics Section, The Graduate Institute of International Studies.
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