Is European M&A Regulation Protectionist?
WHU - Otto Beisheim School of Management
Eric De Bodt
Université Lille Nord de France - SKEMA Business School
California Institute of Technology
EFA 2004 Maastricht Meetings Paper No. 2318
Why do regulatory authorities scrutinize mergers and acquisitions? The authorities themselves claim to be combating monopoly power and protecting consumers. But the last two decades of empirical research has found little supporting evidence for such motives. An alternative is that M&A regulation is actually designed to protect privileged firms. We provide a test of protectionism by studying whether European regulatory intervention is more likely when European firms are harmed by increased competition. Our findings raise a suspicion of protectionist motivations by the European regulator during the nineties. The results are robust to many statistical difficulties, including endogeneity between investor valuations and regulatory actions.
Number of Pages in PDF File: 46
Keywords: merger and acquisition regulation protectionism
JEL Classification: G34 G38
Date posted: July 22, 2004
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