Competition Law and Economic Inequality: A Comparative Analysis of Text Similarity using General Synthetic Control Method
Working Paper CCLP(L) 53, 2020
33 Pages Posted: 20 Nov 2020 Last revised: 20 Apr 2021
Date Written: April 20, 2021
To what extent does the choice of competition law text associate with economic inequality? While competition laws have been suggested as a possible factor contributing to current inequality trends in developed countries and as a viable instrument to address them, little empirical evidence exists on their distributional effects. The article utilises a unique estimation strategy based on the textual similarity between competition laws and the General Synthetic Control method. We test the link between the similarity to USA antitrust text and income inequality across developed countries. We show evidence that countries that adopt a USA antitrust text are more likely to exhibit higher income inequality levels. The paper suggests that our findings are related to the institutional structure of antitrust.
Keywords: Income Inequality, Competition Law, Antitrust, Panel-Data, Synthetic Control Method, Empirical Legal Studies
JEL Classification: I32, L40, O4, C33, E02
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