Competition Law and Economic Inequality: A Comparative Analysis of Text ‎Similarity using General Synthetic Control Method

Abstract

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