Monday, January 14, 2008
Posted by D. Daniel Sokol
I like the paper Merger Review: How Much of Industry is Affected in an International Perspective? by Jan De Loecker (NYU Stern School of Business) Jozef Konings (Catholic University of Leuven Department of Economics) and Patrick Van Cayseele (Catholic University of Leuven Department of Economics) for its interesting approach.
ABSTRACT: The paper develops a methodological framework for quantifying the impact of merger control regulations. While most countries have different criteria in terms of sales, market shares or combinations of the above, and while listing an inventory of these criteria is easy, such an exercise does not provide an answer regarding their impact on the market for corporate control. A methodology is developed to compare empirically the percentage of firms affected in an industry in a country by the "clearing in advance" regulation. By comparing industries and countries, we are able to provide an indication of the impact of merger regulations for a large number of industries in Europe. As such we provide a first indication of the tightness of ex ante merger review.