Friday, February 3, 2023

Output Effect of Private Antitrust Enforcement

Output Effect of Private Antitrust Enforcement


Sinchit Lai

City University of Hong Kong (CityU) - School of Law


A growing body of literature evaluates the impact of antitrust laws on economic growth. Most of these empirical studies identify a positive impact; however, the existing literature only studies the effect of the existence of antitrust laws, but not their enforcement. To fill this gap in the literature, this Article uses private antitrust case filing numbers to examine the growth effect. Employing U.S. data and, after addressing endogeneity, using a two-stage least squares (2SLS) regression analysis, I identify a negative and robust association between private enforcement and output on a national level in the short run over the period from 1954 to 2019. However, I do not find a robust association between the two in the long run. In view of the results, I hypothesize a mechanism of an adverse effect of private antitrust enforcement on output in the short run.

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