Is European M&A Regulation Protectionist?
WHU - Otto Beisheim School of Management
Eric De Bodt
Université Lille Nord de France - SKEMA Business School
University of California, Los Angeles (UCLA) - Finance Area
Economic Journal, Vol. 117, No. 522, pp. 1096-1121, July 2007
Why do regulatory authorities scrutinise 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 1990s. The results are robust to many statistical difficulties, including endogeneity between investor valuations and regulatory actions.
Number of Pages in PDF File: 26Accepted Paper Series
Date posted: July 8, 2007
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