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The Consistency of Merger Decisions in a Developing Country: The South African Competition Commission

Author

Listed:
  • Richard J. Grimbeek

    (Department of Economics, University of Pretoria)

  • Sunel Grimbeek

    (Department of Economics, University of Pretoria)

  • Steven F. Koch

    (Department of Economics, University of Pretoria)

Abstract
Merger decisions made by the South African Competition Commission from April 2002 to March 2010 are analyzed to empirically identify the factors, which have historically in uenced prohibition, conditional approval and unconditional approval. The key explanatory variables are linked to provisions of the 1998 Competition Act, as well as the timing of merger noti cations, such that the analysis provides insight into the consistency of merger decisions with respect to the legal requirements speci ed in the Act. Although the legislation includes standard economic concerns, it also includes a provision for advancing public interests and development concerns. Initial results point to di ering behaviour over the time period, which suggests that the Commission is inconsistent; however, the majority of those inconsistencies are removed, once additional measures of market contestibility are included in the analysis. The nal results suggest that the Commission is less likely to approve mergers that they link to markets that are less contestable. Furthermore, in addition to protecting competition, the Commission is simultaneously protecting other public interests. Therefore, our research supports the hypothesis that the Commission consistantly applies its legislative remit.

Suggested Citation

  • Richard J. Grimbeek & Sunel Grimbeek & Steven F. Koch, 2011. "The Consistency of Merger Decisions in a Developing Country: The South African Competition Commission," Working Papers 201117, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201117
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    References listed on IDEAS

    as
    1. Jo Seldeslachts & Joseph A. Clougherty & Pedro Pita Barros, 2009. "Settle for Now but Block for Tomorrow: The Deterrence Effects of Merger Policy Tools," Journal of Law and Economics, University of Chicago Press, vol. 52(3), pages 607-634, August.
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    More about this item

    Keywords

    South African Competition Commission; Merger Decisions;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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