Conformity with International Recommendations on Merger Reviews: An Economic Perspective on 'Soft Law'

University of Nottingham Research Paper No. 2006/04

55 Pages Posted: 7 Apr 2006

See all articles by Simon J. Evenett

Simon J. Evenett

University of Oxford - Said Business School; Centre for Economic Policy Research (CEPR)

Alexander Hijzen

Organization for Economic Co-Operation and Development (OECD)

Date Written: April 2006

Abstract

During the current phase of international market integration one important form of corporate restructuring is through cross-border merger or acquisition. Even though such restructuring typically affects the markets of more than one economy, almost all reviews of mergers and acquisitions consider only intra-jurisdictional effects. A prominent international initiative, that has the support of many of the world's competition authorities, seeks to foster both convergence in national merger review regimes and the voluntary adoption of international best practices. Using publicly-available survey data on these regimes, we estimate the relative importance of numerous potential legal, institutional, economic, and political-economy determinants of the degree of national conformity with four merger-related Recommended Practices of the International Competition Network (ICN). We find that the determinants of such conformity differ markedly between the founding members of the ICN and other members. Moreover, certain economic and political-economy factors appear to play a more important role in determining the degree of conformity than legal and institutional factors; a finding that has implications for both the speed and the ultimate extent of convergence in national merger regimes that can be expected from this non-binding or soft law initiative.

Keywords: Merger policy, Cross-border Mergers and Acquisitions, Soft Law

JEL Classification: F02, F21, K21, L44

Suggested Citation

Evenett, Simon J. and Hijzen, Alexander, Conformity with International Recommendations on Merger Reviews: An Economic Perspective on 'Soft Law' (April 2006). University of Nottingham Research Paper No. 2006/04 , Available at SSRN: https://ssrn.com/abstract=893034 or http://dx.doi.org/10.2139/ssrn.893034

Simon J. Evenett (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
44 1865 288 875 (Phone)
44 1865 288 805 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Alexander Hijzen

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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