Competition Law, Antitrust Immunity and Profits: A Dynamic Panel Analysis

30 Pages Posted: 25 Mar 2011

See all articles by Erik Brouwer

Erik Brouwer

Tilburg Law and Economics Center (TILEC)

Fatih Cemil Ozbugday

Ankara Yildirim Beyazit University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 23, 2011

Abstract

This paper tests whether the transition from the old Economic Competition Act, which was based on the so-called "abuse system", to the new Competition Act, which was based on "prohibition system", in the Netherlands had an impact on the price-cost margins in manufacturing industries during the period 1993-2007. The paper further investigates if the price-cost margins were higher in industries where temporary antitrust immunity was granted for subset of firms that engaged in concerted practices. The results indicate that the change in the competition law in the Netherlands had a very small and negative, yet statistically insignificant deterrent effect on the price-cost margins. Elsewhere, markups were higher in industries in which temporary antitrust immunity was granted for some class of coordinated actions.

Keywords: Price-cost margin, Competition law, Antitrust immunity, Antitrust enforcement, Dynamic panel data model, the Netherlands

JEL Classification: K21, L4, L6

Suggested Citation

Brouwer, Erik and Ozbugday, Fatih Cemil, Competition Law, Antitrust Immunity and Profits: A Dynamic Panel Analysis (March 23, 2011). TILEC Discussion Paper No. 2011-022, Available at SSRN: https://ssrn.com/abstract=1793037 or http://dx.doi.org/10.2139/ssrn.1793037

Erik Brouwer (Contact Author)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Fatih Cemil Ozbugday

Ankara Yildirim Beyazit University - Department of Economics ( email )

Cicek St. No 1 Ulus
Sciences Yildirim Beyazit University
Ankara, 06500
Turkey

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