The economic impact of merger control legislation

  • Based on a unique dataset of legislative changes in industrial countries, we identify events that strengthen the competition control of mergers and acquisitions, analyze their impact on banks and non-financial firms and explain the different reactions observed with specific regulatory characteristics of the banking sector. Covering nineteen countries for the period 1987 to 2004, we find that more competition-oriented merger control increases the stock prices of banks and decreases the stock prices of non-financial firms. Bank targets become more profitable and larger, while those of non-financial firms remain mostly unaffected. A major determinant of the positive bank returns is the degree of opaqueness that characterizes the institutional setup for supervisory bank merger reviews. The legal design of the supervisory control of bank mergers may therefore have important implications for real activity.

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Metadaten
Author:Elena CarlettiGND, Philipp Hartmann, Steven Onega
URN:urn:nbn:de:hebis:30-53217
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2008,04
Series (Serial Number):CFS working paper series (2008, 04)
Document Type:Working Paper
Language:English
Year of Completion:2008
Year of first Publication:2008
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2008/03/03
Tag:Competition Policy; Financial Regulation; Legal Institutions; Mergers and Acquisitions
GND Keyword:Bank; Mergers and Acquisitions; Recht
Issue:15 December 2007
Page Number:67
HeBIS-PPN:195433157
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht