Journal of Corporate Finance Vol. 62 2020
Competition Policy and the Profitability of Corporate Acquisitions
Abstract
Merger control exists to help safeguard effective competition. However, findings from a natural experiment suggest that regulatory merger control reduces the profitability of corporate acquisitions. Uncertainty about merger control decisions reduces takeover threats from foreign and very large acquirers, therefore facilitating agency-motivated deals. Valuation effects are more pronounced in countries with stronger law enforcement and in more concentrated industries. Our results suggest that competition policy may impede the efficiency of the M&A market.
- DOI
- 10.1016/j.jcorpfin.2019.101510
- Volume
- 62
- Pages
- 101510
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref