The Dynamics of Mergers among (Ex)Co-Conspirators in the Shadow of Cartel Enforcement

Leslie M. Marx, Duke University - Fuqua School of Business, Economics Group and J. Zhou, Swedish University of Agricultural Sciences (SLU) - Department of Economics; Tilburg Law and Economics Center (TILEC) have an interesting new paper on The Dynamics of Mergers among (Ex)Co-Conspirators in the Shadow of Cartel Enforcement.

ABSTRACT: We investigate cartelists' merger behavior using European Commission (EC) cartel decisions over a 28-year span and information on cartelists' merger activities over the last 30 years. We find that mergers occur frequently but that they cluster in a few particular industries and usually include only a minority of the cartel participants. The EC's leniency program appears to expedite mergers, while the EC's cartel settlement procedure appears to delay mergers. After cartel dissolution, co-conspirators merge at a substantially greater pace. The results shed light on the design of merger policies and enforcement programs against cartels.