The economic impact of merger control legislation

Elena Carletti (), Philipp Hartmann and Steven Onega

No 2008/04, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: 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.

Keywords: Mergers and Acquisitions; Competition Policy; Legal Institutions; Financial Regulation (search for similar items in EconPapers)
JEL-codes: D4 G21 G28 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The economic impact of merger control legislation (2015)
Working Paper: The Economic Impact of Merger Control Legislation (2012)
Working Paper: The Economic Impact of Merger Control Legislation (2011)
Working Paper: The Economic Impact of Merger Control Legislation (2008)
Working Paper: The Economic Impact of Merger Control Legislation (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:200804

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