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- Title
Mergers and the Value of Antitrust Deterrence.
- Authors
Eckbo, B. Espen
- Abstract
While the U.S. has pursued a vigorous antitrust policy towards horizontal mergers over the past four decades, mergers in Canada have until recently been permitted to take place in a virtually unrestricted antitrust environment. The absence of an antitrust overhang in Canada presents an interesting opportunity to test the conjecture that the rigid market share and concentration criteria of the U.S. policy effectively deters a significant number of potentially collusive mergers. The effective deterrence hypothesis implies that the probability of a horizontal merger being anticompetitive is higher in Canada than in the U.S. However, parameters in cross-sectional regressions reject the market power hypothesis on samples of both U.S. and Canadian mergers. Judging from the Canadian evidence, there simply isn't much to deter.
- Subjects
UNITED States; CANADA; HORIZONTAL merger; MERGERS &; acquisitions; ANTITRUST law; MARKET penetration; MARKET entry; MARKET share; INDUSTRIAL concentration; CORPORATIONS
- Publication
Journal of Finance (Wiley-Blackwell), 1992, Vol 47, Issue 3, p1005
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1992.tb04003.x