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An Empirical Analysis of Mexican Merger Policy

Author

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  • Marcos Ávalos

    (Department of Economics, Universidad Iberoamericana, Mexico City. Mexico)

  • Rafael E. de Hoyos

Abstract

A newly created dataset including 239 decisions made by the Mexican Federal Competition Commission on horizontal mergers between 1997 and 2001 is used to estimate the different factors affecting the Commission’s resolution. The paper approximates the decision making process using two different discrete choice models. The results indicate that, contrary to the Commission’s objective, the presence of efficiency gains increases the probability of a case being issued. The findings also show that factors different from the ones explicitly mentioned by the Commission have a significant effect on the Commission’s final decision. In particular, the presence of a foreign company among the would-be merger firms significantly increases the likelihood of observing an allowed merger

Suggested Citation

  • Marcos Ávalos & Rafael E. de Hoyos, 2010. "An Empirical Analysis of Mexican Merger Policy," Working Papers 0210, Universidad Iberoamericana, Department of Economics.
    • Handle: RePEc:uic:wpaper:0210
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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