The Political Economy of European Merger Control: Evidence Using Stock Market Data

Damien Neven, Röller, Lars-Hendrik and Tomaso Duso

No 3880, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The objective of this Paper is to investigate the determinants of EU merger control decisions. We consider a sample of 164 EU merger control decisions and evaluate the anti-competitive consequences of these mergers from the reaction of the stock market price of competitors to the merging firms. We then account for the discrepancies between the actual decisions and what the stock market would have dictated in terms of the political economy surrounding the cases. Our results suggest that the commission?s decisions cannot be solely accounted for by the motive of protecting consumer surplus. The institutional and political environment does matter. As far as firms? influence is concerned, however, our data suggests that the commission?s decisions are not sensitive to firms? interests. Instead, the evidence suggests that other factors ? such as country and industry effects, as well as market definition and procedural aspects ? do play significant roles.

Keywords: Mergers; Political economy (search for similar items in EconPapers)
JEL-codes: K20 L10 L40 (search for similar items in EconPapers)
Date: 2003-04
New Economics Papers: this item is included in nep-eec, nep-law and nep-pol
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Citations: View citations in EconPapers (24)

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Related works:
Journal Article: The Political Economy of European Merger Control: Evidence using Stock Market Data (2007)
Working Paper: The Political Economy of European Merger Control: Evidence using Stock Market Data (2002)
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