Publication type: Conference other
Type of review: Peer review (abstract)
Title: The fat-cat effect of cartels
Authors: Carree, Martin
Günster, Andrea
van Dijk, Mathijs
et. al: No
Conference details: 44th Annual Conference of the European Association for Research in Industrial Economics (EARIE), Maastricht, Netherlands, 31 August - 2 September 2017
Issue Date: 2017
Language: English
Subject (DDC): 338: Production
Abstract: This paper examines how the formation and termination of cartels affect the performance and behavior of their member firms. We identify 252 publicly listed firms active in 66 European cartels between 1980 and 2007. We investigate both static effects (increased profitability) and changes in strategic firm behavior (R&D investment and acquisition rate). The results show that R&D investment is (increasingly) lower during the cartel period, while the rate of acquiring other firms in fact increases. Hence, next to allocative inefficiency, cartels may also give rise to dynamic inefficiencies in the form of less innovation efforts or increased concentration.
Fulltext version: Published version
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Center for Economic Policy (FWP)
Appears in collections:Publikationen School of Management and Law

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