The Economic Impact of Merger Control Legislation

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Show simple item record CARLETTI, Elena HARTMANN, Philipp ONGENA, Steven 2012-04-02T08:59:55Z 2012-04-02T08:59:55Z 2012
dc.identifier.issn 1725-6704
dc.description.abstract We construct a unique dataset of legislative reforms in merger control legislation that occurred in nineteen industrial countries in the period 1987-2004, and investigate the economic impact of these changes on stock prices. In line with the hypothesis that merger control should challenge anticompetitive mergers and thus limit future monopolistic profits, we find that the strengthening of merger control decreases the stock prices of non-financial firms. In contrast, we find that bank stock prices increase. Cross sectional regressions show that the discretion embedded in the supervisory control of bank mergers is a major determinant of the positive bank stock returns. This suggests that merger control is anticipated to create a “separation of powers” and “checks and balances” mechanism in the banking sector that mitigates the potential for abuse and wasteful enforcement of the supervisory control. We provide a case study further supporting this interpretation. en
dc.format.mimetype application/pdf
dc.language.iso en en
dc.relation.ispartofseries EUI ECO en
dc.relation.ispartofseries 2012/12 en
dc.rights info:eu-repo/semantics/openAccess
dc.subject merger control en
dc.subject legal institutions en
dc.subject financial regulation en
dc.subject G21 en
dc.subject G28 en
dc.subject D4 en
dc.title The Economic Impact of Merger Control Legislation en
dc.type Working Paper en
dc.neeo.contributor CARLETTI|Elena|aut|EUI70001
dc.neeo.contributor HARTMANN|Philipp|aut|
dc.neeo.contributor ONGENA|Steven|aut|
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