A Political Economy Model of Merger Policy in International Markets

22 Pages Posted: 15 Dec 2011

See all articles by Massimo Motta

Massimo Motta

Universitat Pompeu Fabra

Michele Ruta

Economic Research Division, WTO; Columbia Business School - Economics Department; International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: January 2012


This paper looks at the political economy of merger policy under autarky and in international markets. We assume that merger policy is decided by antitrust authorities — whose objective is to maximize welfare — but can be influenced by governments, which are subject to lobbying by firms (insiders or outsiders to the merger). We argue that political economy distortions may explain some of the recently observed merger policy conflicts between authorities and politicians, as well as between institutions belonging to different countries. We illustrate our analysis with applications motivated by recent merger cases that have been widely debated in the international press.

Suggested Citation

Motta, Massimo and Ruta, Michele, A Political Economy Model of Merger Policy in International Markets (January 2012). Economica, Vol. 79, Issue 313, pp. 115-136, 2012, Available at SSRN: https://ssrn.com/abstract=1972754 or http://dx.doi.org/10.1111/j.1468-0335.2010.00874.x

Massimo Motta (Contact Author)

Universitat Pompeu Fabra ( email )

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Michele Ruta

Economic Research Division, WTO ( email )

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HOME PAGE: http://www.iue.it/Personal/Fellows/MicheleRuta/Welcome.htm

Columbia Business School - Economics Department ( email )

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International Monetary Fund (IMF) ( email )

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