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An Empirical Investigation of the Mergers Decision Process in Australia

17 Pages Posted: 28 Nov 2012  

Robert V. Breunig

Australian National University (ANU) - Crawford School of Public Policy

Flavio M. Menezes

University of Queensland - School of Economics

Kelvin Jui Keng Tan

University of Queensland - Business School; Financial Research Network (FIRN)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2012

Abstract

In this article, we examine a database assembled from an Australian public register of 553 merger decisions taken between March 2004 and July 2008. Mergers may be accepted without public assessment, accepted in conjunction with publication of a Public Competition Assessment, or rejected. The public register contains qualitative information about the reasons given by the regulator for each decision. We estimate an ordered probit model, using these three possible outcomes, with the objective of gaining a better insight into the regulator’s decision‐making process. Our two major findings are: (i) the existence of entry barriers and the existence of undertakings are highly correlated with the regulator’s decision to closely scrutinise a merger proposal; and (ii) if we compare two decisions, one which does not mention entry barriers (or import competition) with a decision that does mention entry barriers (or import competition), then the latter is significantly more likely to be opposed than the former.

JEL Classification: L4

Suggested Citation

Breunig, Robert V. and Menezes, Flavio M. and Tan, Kelvin Jui Keng, An Empirical Investigation of the Mergers Decision Process in Australia (December 2012). Economic Record, Vol. 88, Issue 283, pp. 459-475, 2012. Available at SSRN: https://ssrn.com/abstract=2181837 or http://dx.doi.org/10.1111/j.1475-4932.2012.00831.x

Robert V. Breunig (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

7 Liversidge Street
Lennox Crossing
Canberra, ACT 0200
Australia
61261252148 (Phone)

HOME PAGE: http://https://crawford.anu.edu.au/crawford_people/content/staff/rbreunig.php

Flavio M. Menezes

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

Kelvin Jui Keng Tan

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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