The Effects of Antitrust Laws on Horizontal Mergers: International Evidence
- Authors
- Chung, Chune Young; Hasan, Iftekhar; Hwang, JiHoon; Kim, Incheol
- Issue Date
- 2023
- Publisher
- Cambridge University Press
- Keywords
- antitrust law; horizontal M&A; market power; merger control
- Citation
- Journal of Financial and Quantitative Analysis
- Journal Title
- Journal of Financial and Quantitative Analysis
- URI
- https://scholarworks.bwise.kr/cau/handle/2019.sw.cau/67945
- DOI
- 10.1017/S0022109023000467
- ISSN
- 0022-1090
- Abstract
- This study examines how antitrust law adoptions affect horizontal merger and acquisition (M&A) outcomes. Using the staggered introduction of competition laws in 20 countries, we find antitrust regulation decreases acquirers’ five-day cumulative abnormal returns surrounding horizontal merger announcements. A decrease in deal value, target book assets, and industry peers' announcement returns are consistent with the market power hypothesis. Exploiting antitrust law adoptions addresses a downward bias to an estimated effect of antitrust enforcement (Baker (2003)). The potential bias from heterogeneous treatment effects does not nullify our results. Overall, antitrust policies seem to deter post-merger monopolistic gains, potentially improving customer welfare. © 2023 Cambridge University Press. All rights reserved.
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Collections - College of Business & Economics > School of Business Administration > 1. Journal Articles
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