Publication detail

The Efficiency of EU Merger Control during the Period from 1990-2008

Author(s): PhDr. Goran Serdarević M.A.,
prof. PhDr. Petr Teplý Ph.D.,
Type: Articles in journals with impact factor
Year: 2011
Number: 3
ISSN / ISBN: 0015-1920
Published in: Czech Journal of Finance, Czech Republic
Publishing place: Prague, Czech Republic
Keywords: merger control, European Union, political economy, regulatory reform, PROBIT model
JEL codes: L4, K21, C25, D78
Suggested Citation: pp. 253-276
Grants: GACR 403/10/1235 (2010-2014) Institutional Responses to Financial Market Failures GACR 403/10/P278 (2010-2012) The Implications of The Global Crisis on Economic Capital Management of Financial Institutions GAUK-58410- Efficiency of EU Merger Control IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: The main goal of this paper is to empirically test the function of European merger control
in light of the 2004 regulatory reform, which was expected to introduce a more efficient
regulatory framework for the assessment of mergers within the EU. We use stock market
data to identify cases where there are discrepancies between the European Commission’s
decisions compared to market evaluations of the mergers in question. Using the PROBIT
model, these cases are further investigated to discover the sources of these discrepancies.
In line with previous studies, our results suggest that the discrepancies are caused by
procedural and institutional factors. Nevertheless, the regulatory reform introduced
in 2004 has, to some extent, enhanced the efficiency of European merger control in
the sense that the Commission’s assessments of mergers under the new regulation are
more consistent with the market evaluations. We found that the probability of an anti-
-competitive deal being cleared decreases significantly under the new regulatory framework.
Nevertheless, the occurrence of unnecessary remedies has not decreased as the result
of the new merger control system. To the authors’ best knowledge, this paper is the first study using stock market data to
evaluate the recent reform of European merger control.
Downloadable: CZJF 3-2011 EU Mergers 1990-2008 GS+PT


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