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An Empirical Investigation of the Mergers Decision Process in Australia

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Abstract

In this paper we examine a database assembled from an Australian public register of 553 merger decisions taken between March 2004 and July 2008. Mergers may be accepted without public assessment, accepted in conjunction with publication of a Public Competition Assessment, or rejected. We estimate an ordered probit model, using these three possible outcomes, with the objective of gaining better insight into the regulator�s decision-making process. Our two major findings are: (i) the existence of entry barriers and the existence of undertakings are highly correlated with the regulator�s decision to closely scrutinise a merger proposal; and (ii) if we compare two decisions, one which does not mention entry barriers (or import competition) with a decision that does mention entry barriers (or import competition), then the latter is significantly more likely to be opposed than the former.

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  • Robert Breunig & Flavio M. Menezes, 2008. "An Empirical Investigation of the Mergers Decision Process in Australia," Discussion Papers Series 382, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:382
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    1. Khemani, R S & Shapiro, Daniel M, 1993. "An Empirical Analysis of Canadian Merger Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 161-177, June.
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    1. Qing Yang & Michael Pickford, 2014. "The Merger Clearance Decision Process in New Zealand: Application of a New Two-Stage Probit Model," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(3), pages 299-325, May.
    2. Robert W Faff & Stephen Gray & Kelvin Jui Keng Tan, 2016. "A contemporary view of corporate finance theory, empirical evidence and practice," Australian Journal of Management, Australian School of Business, vol. 41(4), pages 662-686, November.
    3. Kelvin Jui Keng Tan, 2017. "Why Do Overconfident REIT CEOs Issue More Debt? Mechanisms and Value Implications," Abacus, Accounting Foundation, University of Sydney, vol. 53(3), pages 319-348, September.
    4. Diego S. Cardoso & Mariusa M. Pitelli & Adelson M. Figueiredo, 2021. "An Econometric Analysis of the Brazilian Merger Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(1), pages 103-132, August.

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