Competition policy and the profitability of corporate acquisitions
Accepted version
Peer-reviewed
Repository URI
Repository DOI
Change log
Authors
Dissanaike, G
Drobetz, W
Momtaz, PP
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.
Description
Keywords
3501 Accounting, Auditing and Accountability, 3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services
Journal Title
Journal of Corporate Finance
Conference Name
Journal ISSN
0929-1199
Volume Title
62
Publisher
Elsevier BV