The Anticompetitive Effect of Minority Share Acquisitions: Evidence from the Introduction of National Leniency Programs

Sven Heim, Kai Hüschelrath, Ulrich Laitenberger, Yossi Spiegel

Research output: Contribution to journalArticlepeer-review

Abstract

We address the growing concern that minority shareholding (MS) in rival firms may lessen competition, using the introduction of national leniency programs (LPs) as a shock that destabilizes collusive agreements. Based on data from 63 countries, we find a large and signifi-cant immediate increase in domestic horizontal MS acquisitions once an LP is introduced but only in countries where the LP is deemed to be effective. There is no effect on non-horizontal or cross-border MS acquisitions. Our findings suggest that firms may use MS acquisitions to either stabilize collusive agreements or soften competition in the event that collusion breaks down.

Original languageEnglish
Pages (from-to)366-410
Number of pages45
JournalAmerican Economic Journal: Microeconomics
Volume14
Issue number1
DOIs
StatePublished - 2022

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