Mergers, Antitrust, and the Interplay of Entrepreneurial Activity and the Investments that Fund It

19 Pages Posted: 21 Jun 2021 Last revised: 5 Aug 2021

See all articles by Gary Dushnitsky

Gary Dushnitsky

London Business School; University of Pennsylvania - Management Department

D. Daniel Sokol

USC Gould School of Law; USC Marshall School of Business

Date Written: August 5, 2021

Abstract

This paper addresses the potentially negative implications of proposed antitrust legislation on the entrepreneurial ecosystem in general and particularly focuses on the Venture Capitalists (VCs) that fund it. First, it offers a review of how antitrust merger law currently works and how proposed legislative changes to antitrust may threaten the innovative VC-backed ecosystem that has made the United States the center of global innovation across many different industries. Accompanying this review are some empirical observations. Second, recognizing that understanding innovative entrepreneurial activity calls for a deep appreciation of those who back it, the paper provides an overview of the entrepreneurial ecosystem and the motivations of VCs. In so doing, it identifies the drivers of entrepreneurial innovation and explain why changes to merger law may threaten these models of facilitating innovative growth-orientated entrepreneurs. Lastly, the paper concludes that changes to merger law may have negative effects on the entire entrepreneurial ecosystem and hinder US innovation.

Keywords: mergers, antitrust, entrepreneurship, venture capital

JEL Classification: K21, K22, M13, L13, L4, L40

Suggested Citation

Dushnitsky, Gary and Sokol, D. Daniel, Mergers, Antitrust, and the Interplay of Entrepreneurial Activity and the Investments that Fund It (August 5, 2021). USC CLASS Research Paper No. CLASS21-35, USC Law Legal Studies Paper No. 21-35, Available at SSRN: https://ssrn.com/abstract=3863580 or http://dx.doi.org/10.2139/ssrn.3863580

Gary Dushnitsky

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

HOME PAGE: http://faculty.london.edu/gdushnitsky/index.html

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

D. Daniel Sokol (Contact Author)

USC Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

USC Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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