Minority Share Acquisitions and Collusion: Evidence from the Introduction of National Leniency Programs

40 Pages Posted: 9 Oct 2017 Last revised: 7 Nov 2018

See all articles by Sven Heim

Sven Heim

ZEW – Leibniz Centre for European Economic Research

Kai Hüschelrath

ZEW – Leibniz Centre for European Economic Research

Ulrich Laitenberger

Telecom ParisTech; ZEW – Leibniz Centre for European Economic Research

Yossi Spiegel

Tel Aviv University, Coller School of Management; Centre for Economic Policy Research (CEPR); ZEW – Leibniz Centre for European Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: 2017

Abstract

There is a growing concern that minority shareholding (MS) in rival firms may facilitate collusion. To examine this concern, we exploit the fact that leniency programs (LPs) are generally recognized as a shock that destabilizes collusive agreements and study the effect that the introduction of an LP has on horizontal MS acquisitions. Using data from 63 countries over the period 1990-2013, we find a large increase in horizontal MS acquisitions in the year in which an LP is introduced, especially in large rivals. The effect is present however only in countries with an effective antitrust enforcement and low levels of corruption and only when the acquisitions involve stakes of 10%-20%. These results suggest that MS acquisitions may stabilize collusive agreements that were destabilized by the introduction of the LP.

Keywords: minority shareholdings, collusion, leniency programs, cartel stability

JEL Classification: G34, K21, L41

Suggested Citation

Heim, Sven and Hüschelrath, Kai and Laitenberger, Ulrich and Spiegel, Yossi, Minority Share Acquisitions and Collusion: Evidence from the Introduction of National Leniency Programs (2017). ZEW - Centre for European Economic Research Discussion Paper No. 17-037. Available at SSRN: https://ssrn.com/abstract=3049775 or http://dx.doi.org/10.2139/ssrn.3049775

Sven Heim (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Kai Hüschelrath

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Ulrich Laitenberger

Telecom ParisTech ( email )

46 rue Barrault
Paris, Cedex 13 75634
France

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
Mannheim, 68034
Germany

Yossi Spiegel

Tel Aviv University, Coller School of Management ( email )

Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-9063 (Phone)
972-3-640-7739 (Fax)

HOME PAGE: http://www.tau.ac.il/~spiegel

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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