Is European M&A Regulation Protectionist?

26 Pages Posted: 8 Jul 2007  

Nihat Aktas

WHU - Otto Beisheim School of Management

Eric de Bodt

Université de Lille

Richard Roll

California Institute of Technology

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Abstract

Why do regulatory authorities scrutinise mergers and acquisitions? The authorities themselves claim to be combating monopoly power and protecting consumers. But the last two decades of empirical research has found little supporting evidence for such motives. An alternative is that M&A regulation is actually designed to protect privileged firms. We provide a test of protectionism by studying whether European regulatory intervention is more likely when European firms are harmed by increased competition. Our findings raise a suspicion of protectionist motivations by the European regulator during the 1990s. The results are robust to many statistical difficulties, including endogeneity between investor valuations and regulatory actions.

Suggested Citation

Aktas, Nihat and de Bodt, Eric and Roll, Richard, Is European M&A Regulation Protectionist?. Economic Journal, Vol. 117, No. 522, pp. 1096-1121, July 2007. Available at SSRN: https://ssrn.com/abstract=998153 or http://dx.doi.org/10.1111/j.1468-0297.2007.02068.x

Nihat Aktas (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Eric De Bodt

Université de Lille ( email )

1 place Déliot, BP381
59020 Lille Cedex
France
+03 20 90 74 77 (Phone)
+03 20 90 77 02 (Fax)

HOME PAGE: http://www.edebodt.net

Richard W. Roll

California Institute of Technology ( email )

1200 East California Blvd
Mail Code: 228-77
Pasadena, CA 91125
United States
626-395-3890 (Phone)
310-836-3532 (Fax)

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