Abstract

http://ssrn.com/abstract=1095684
 
 

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The Economic Impact of Merger Control Legislation


Elena Carletti


European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Frankfurt - Center for Financial Studies

Philipp Hartmann


European Central Bank (ECB); Centre for Economic Policy Research (CEPR) - International Macroeconomics

Steven Ongena


University of Zurich and SFI

June 2, 2014

TILEC Discussion Paper No. 2008-006
FDIC Center for Financial Research Working Paper No. 2008-12

Abstract:     
Based on a unique dataset of legislative changes in industrial countries, we identify events that strengthen the competition control of mergers and acquisitions, analyze their impact on banks and non-financial firms and explain the different reactions observed with specific regulatory characteristics of the banking sector. Covering nineteen countries for the period 1987 to 2004, we find that more competition-oriented merger control increases the stock prices of banks and decreases the stock prices of non-financial firms. Bank targets become more profitable and larger, while those of non-financial firms remain mostly unaffected. A major determinant of the positive bank returns is the degree of opaqueness that characterizes the institutional setup for supervisory bank merger reviews. The legal design of the supervisory control of bank mergers may therefore have important implications for real activity.

Number of Pages in PDF File: 50

Keywords: mergers and acquisitions, competition policy, legal institutions, financial regulation

JEL Classification: G21, G28, D4

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Date posted: February 20, 2008 ; Last revised: June 2, 2014

Suggested Citation

Carletti, Elena and Hartmann, Philipp and Ongena, Steven, The Economic Impact of Merger Control Legislation (June 2, 2014). TILEC Discussion Paper No. 2008-006. Available at SSRN: http://ssrn.com/abstract=1095684 or http://dx.doi.org/10.2139/ssrn.1095684

Contact Information

Elena Carletti
European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )
Via dei Roccettini 9
via delle Fontanelle 10
50016 San Domenico di Fiesole, Florence 50014
Italy
University of Frankfurt - Center for Financial Studies ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
49 69 24 29 41 17 (Phone)
49 69 24 29 41 77 (Fax)
Philipp Hartmann
European Central Bank (ECB) ( email )
Kaiserstrasse 29
Frankfurt am Main, D-60311
Germany
(49 69) 1344 7356 (Phone)
(49 69) 1344 8553 (Fax)
Centre for Economic Policy Research (CEPR) - International Macroeconomics
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Steven R. G. Ongena (Contact Author)
University of Zurich and SFI ( email )
Plattenstrasse 14
Zürich, 8032
Switzerland
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