Wednesday, February 24, 2016
Qing Gong Yang and Michael Pickford are MODELING THE DURATION OF MERGER REVIEWS IN NEW ZEALAND.
ABSTRACT: The limited evidence on the speed of processing merger reviews by competition agencies shows that the time taken varies widely between cases. In this article, we explore which factors influence the duration of merger reviews by applying multivariate duration analysis to a dataset of 130 merger decisions made by the New Zealand Commerce Commission between 2001 and 2010. Our results suggest that a range of factors influence duration, including (1) the nature of the decision, and especially whether the application is declined, (2) the size of the application, (3) the potential impact on competition, measured by market concentration and barrier to entry height, (4) the complexity of the economic analysis, and (5) the Commission's merger workload. We use a competing-risks model that reflects the three alternative decisions available to the Commission (clear at stage 1, clear at stage 2, and decline). We find that the influence of some of these factors varies greatly between decision types and that declined decisions take much longer on average, probably because declines can lead to an appeal to the High Court by disappointed applicants.