Review of Financial Studies Vol. 32 No. 7 2019
Anticollusion Enforcement: Justice for Consumers and Equity for Firms
Abstract
We consider the case of changing competition that comes from stronger antitrust enforcement around the world to show that, as the equilibrium switches from collusion to oligopolistic competition, firms step up investment and increase equity issuance. As a result, debt ratios fall. These results imply the importance of financial flexibility in surviving competitive threats. Our identification relies on a difference-in-differences estimation based on the staggered passage of leniency programs in 63 countries around the world from 1990 to 2012. Received December 12, 2016; editorial decision July 10, 2018 by Editor Andrew Karolyi.
- DOI
- 10.1093/rfs/hhy094
- Volume
- 32
- Issue
- 7
- Pages
- 2587-2624
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex