Deterrence Effects in Russian Merger Control: Empirical Evidence

Abstract

The present study focuses on the deterrence effects of Russian merger control. The impact of merger control instruments (remedies and prohibitions) on future merger activity reflects the mechanism of the deterrence effects. We use panel data on merger control decisions to estimate empirically the ability of antitrust actions to deter firms from merging. The estimation procedure was based on several methods including Arellano—Bond estimator. The findings of the research illustrate the presence of deterrence effects of Russian merger control. At the same time remedies do not involve deterrence effects in Russia whereas prohibitions can deter future merger activity. Studying deterrence effects of merger policy tools may be an essential step in understanding benefits of merger control as deterrent effects may be even more substantial than direct effects of merger control.