Failing Firms and Declining Industries

THREE ISSUES IN COMPETITION LAW AND POLICY, pp. 1691-1716, American Bar Association, 2008

26 Pages Posted: 1 Jan 2010  

Philip B Nelson

Economists Incorporated

Henry B. McFarland

Economists Incorporated

Date Written: 2008

Abstract

This chapter provides an economic perspective on merger policy for failing firms and declining industries. It examines the evolution of the failing firm defense and the underlying principles of the defense, including financial condition, exit of assets due to the inability to reorganize, and absence of less anticompetitive purchasers. The economic rationale for the defense is examined, with particular reference to efficiency and competitive implications of the failing firm defense; the defense is also compared to efficiency defenses. The chapter also discusses how the principles underlying the treatment of failing firms might apply to firms in declining industries.

Keywords: failing firm, merger, declining industry

JEL Classification: K21, G34

Suggested Citation

Nelson, Philip B and McFarland, Henry B., Failing Firms and Declining Industries (2008). THREE ISSUES IN COMPETITION LAW AND POLICY, pp. 1691-1716, American Bar Association, 2008 . Available at SSRN: https://ssrn.com/abstract=1529815

Philip B Nelson

Economists Incorporated ( email )

Washington, DC 20036
United States

Henry B. McFarland (Contact Author)

Economists Incorporated ( email )

Washington, DC 20036
United States

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