Strategic Response to Merger Control: Evidence around National and Supranational Thresholds
32 Pages Posted: 22 Apr 2021
Date Written: April 21, 2021
Size thresholds exist for overall, national merger review and for assignment to national versus supranational responsibility. I analyse competition effects close to these review thresholds. Firms could strategically pursue competition-reducing mergers before they come under any regulatory oversight. The results, though, point out another type of strategic behaviour by firms: 3-4 years after merger finalisation, 20 percent fewer procurement auctions receive more than one bid after mergers reviewed by national authorities, both in comparison to non-reviewed and to supranationally reviewed cases. Finding lower competition with a 3-4 year lag could be a result of the end of the forecast horizon of the competition authority. An interpretation applying to the positive competition effect for the supranationally regulated cases is that supranational regulation is helpful to avoid political interference.
Keywords: Mergers, Threshold, Competition, Auctions, Regulation
JEL Classification: K21, D44, G34, L22, L40
Suggested Citation: Suggested Citation