Collusion and M&As(mergers and acquisitions)are two alternative strategies for enterprises to acquire market power.China's antitrust enforcement adopts the delegated model,and horizontal collusion cases mainly rely on provincial law enforcement agencies to investigate and punish,while M&A activities relies on the Anti-monopoly Law Enforcement Agency under the State Council to conduct prior review.Utilizing the manually constructed horizontal monopoly agreement enforcement database alongside M&As data of Chinese enterprises,this paper analyzes the relationship between the breakdown of collusion and subsequent M&A activities,employing a panel two-way fixed effects model for analysis.The results are as follows.Firstly,the suppression of collusion by provincial law enforcement agency has a notable deterrent effect,which significantly increases the number of M&As initiated by enterprises in the province.The regression results show that,on average,the number of monthly M&As initiated by provincial enterprises increased by about 3.8％due to the investigation of collusion cases by provincial anti-monopoly law enforcement agency.In other words,M&As become a strategic response of enterprises to the crackdown on collusion by the provincial law enforcement agency.Secondly,the institutional arrangement in China,which mainly relies on provincial law enforcement agencies to combat collusion,reveals regional and industrial heterogeneity in strategic M&A activities.The empirical analysis highlights several key insights:(1)The breakdown of collusion significantly boosts the number of M&As within the same province and within the same industry.However,the impact on cross-province and cross-industry M&As is not significant.Further empirical analysis which distinguishes collusive industries from non-collusive industries found that,the crackdown on collusive industries by the provincial law enforcement agency significantly encouraged enterprises in collusive industries to initiate more M&As.(2)The breakdown of collusion does not have a cross-provincial deterrent effect,and the breakdown of collusion in one province does not significantly promote more M&As initiated by enterprises in the same(collusion)industry in other provinces.(3)Considering the cost of M&As,the strategic response to anti-collusion enforcement shows firm heterogeneity.The suppression of collusion by provincial law enforcement agency encourages firms with a high solvency ratio to initiate more M&As,while those with a low solvency ratio do not.The main innovation of this paper is to discover the substitution of merger and acquisition for collusion under China's anti-monopoly law enforcement delegated model,especially the substitution effect has regional and industry heterogeneity,which is mainly significant within the province and industry.The conclusion of this paper has some policy implications for China's anti-monopoly law enforcement.Anti-monopoly law enforcement agency needs to pay attention to the strategic response of enterprises to anti-collusion policy.
NETL
NSTL
万方数据
