Antitrust Commission Structure and Merger Reviews in Emerging Economies: The Case of Brazil.

Merger reviews by antitrust authorities can yield a wide variety of outcomes ranging from approval without restrictions to significant restraints placed on merging firms. Clearly, the outcome of a merger review can have a significant economic impact on the merging firms as well as on competition in their markets. While considerable prior literature has investigated the influence of various aspects of industry structure on merger review outcomes, limited attention has been devoted to how the structural characteristics of the antitrust authority undertaking the merger review influence these outcomes. Prior work has also typically focused on developed economies with well-established antitrust regimes.  In contrast, this paper draws upon multiple theoretical perspectives from organization theory, law and economics to explore these issues in the context of an emerging economy.  Using a unique dataset of 30,543 votes on 5,091 proposed mergers between 2000 and 2013 by 36 different commissioners empaneled on the Brazilian antitrust authority, we provide evidence on the influence of multiple dimensions of the antitrust commission’s organizational structure on merger review outcomes. Specifically, we demonstrate that factors such as commissioners’ political ideology, professional background, past work experience in the public sector, and proximity to the end of their mandates on the commission affect the probability of intervention in proposed mergers.  We discuss implications of our research findings for research and public policy.