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Stealth Consolidation: Evidence from an Amendment to the Hart-Scott-Rodino Act

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  • Thomas G. Wollmann

Abstract

Prospective merger review is the most frequent application of antitrust law. It exempts transactions on the basis of size, though small deals can have large anticompetitive effects in segmented industries. I examine its impact on antitrust enforcement and merger activity in the context of an abrupt increase in the US exemption threshold. I find that among newly-exempt deals, antitrust investigations fall to almost zero while mergers between competitors rise sharply. Effectively all of the rise reflects an endogenous response of firms to reduced premerger scrutiny, consistent with large deterrent effects of antitrust enforcement.

Suggested Citation

  • Thomas G. Wollmann, 2019. "Stealth Consolidation: Evidence from an Amendment to the Hart-Scott-Rodino Act," American Economic Review: Insights, American Economic Association, vol. 1(1), pages 77-94, June.
    • Handle: RePEc:aea:aerins:v:1:y:2019:i:1:p:77-94
    Note: DOI: 10.1257/aeri.20180137
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    References listed on IDEAS

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    1. David Autor & David Dorn & Lawrence F Katz & Christina Patterson & John Van Reenen, 2020. "The Fall of the Labor Share and the Rise of Superstar Firms [“Automation and New Tasks: How Technology Displaces and Reinstates Labor”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 645-709.
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    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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