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Endogenous choice of minority shareholdings: Effects on product market competition

Author

Listed:
  • Samuel de Haas

    (Justus-Liebig-University Giessen)

Abstract

Non-controlling minority shareholdings in rivals (NCMS) lower the sustainability of collusion under a wide variety of circumstances. Nevertheless, NCMS are sometimes deemed to facilitate collusion, in particular if the level of NCMS is exogenous. The present paper endogenizes firms' choice of NCMS and answers the question: Would colluding firms find it rational to acquire NCMS in rivals? The study of the acquisition reveals that firms have an incentive to acquire NCMS which are accompanied by a shift from collusive to competitive behaviour.

Suggested Citation

  • Samuel de Haas, 2019. "Endogenous choice of minority shareholdings: Effects on product market competition," MAGKS Papers on Economics 201912, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201912
    as

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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2019/12-2019_de_haas.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Collusion; Coordinated Effects; Minority Shareholdings; Merger Control; Unilateral Effects;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • 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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