Legal Mechanisms Supporting Economic Concentration

Banking Quarterly, 2011

24 Pages Posted: 5 Aug 2011

See all articles by Adi Ayal

Adi Ayal

Bar-Ilan University - Faculty of Law

Date Written: August 5, 2011


Economic concentration has become a political and social issue, beyond its direct economic implications. Public outrage has been expressed at the concentration of economic power in the hands of few large conglomerates and those wielding power through them. In this paper I explore the legal mechanisms which allow for and facilitate such economic concentration. I explore antitrust and corporate law and their interaction, from the focus on micro-effects of specific markets and firms (rather than macro-effects), to specific rules which allow for conglomerate growth and pyramidial structures. Contrasting the economic benefits of concentration with public outcry, I assess the political factors driving the calls for reducing concentration, and conclude that while economic rhetoric looms large in the debate, the true issues are political and the feeling of 'the common man' that he lacks influence and is taken advantage of. The calls for regulation are thus a cry for the state to step in and wield a larger stick than that held by large conglomerates. In essence, a call for state political power to loom larger than firm economic power.

Note: Downloadable document is in Hebrew.

Keywords: economic concentration, economic power, antitrust, corporate law

JEL Classification: D43, D63, D72, E61, E65, G38, H32, K21, K22

Suggested Citation

Ayal, Adi, Legal Mechanisms Supporting Economic Concentration (August 5, 2011). Banking Quarterly, 2011, Available at SSRN:

Adi Ayal (Contact Author)

Bar-Ilan University - Faculty of Law ( email )

Faculty of Law
Ramat Gan, 52900


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