Title: The impact of European antitrust policy : evidence from the stock market
Authors : Günster, Andrea Maria
van Dijk, Mathijs
Published in : International Review of Law and Economics
Volume(Issue) : 46
Pages : 20
Pages to: 33
Publisher / Ed. Institution : Elsevier
Issue Date: 2015
License (according to publishing contract) : Licence according to publishing contract
Type of review: Peer review (Publication)
Language : English
Subjects : Antitrust; Competition policy; European Commission; Event study
Subject (DDC) : 349: Comparative law and foreign law
Abstract: We evaluate the impact of European antitrust policy by analyzing the stock market response to investigation announcements, infringement decisions, and appeals for 253 companies involved in 118 European antitrust cases over 1974–2004. We find significantly negative stock price responses of almost -5% around the dawn raid and -2% around the final decision, and a significantly positive response of up to 4% around a successful appeal. These numbers correspond to a total market value loss of €24 billion around the raid and the decision, of which roughly 75% cannot be explained by fines and legal costs. The stock market thus anticipates a decrease in profitability and reputational damage. The magnitude of the market response depends on the fine, infringement duration, and in particular firm size and media attention. Small firms suffer more from an infringement decision. Greater newspaper coverage is associated with a more pronounced response, suggesting the importance of reputational effects.
Departement: School of Management and Law
Organisational Unit: Center for Economic Policy (FWP)
Publication type: Article in scientific Journal
DOI : 10.1016/j.irle.2015.12.001
ISSN: 0144-8188
URI: https://digitalcollection.zhaw.ch/handle/11475/9102
Appears in Collections:Publikationen School of Management and Law

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