CEF.UP - FIN Seminar | Webinar - Manipulating Growth: The Unintended Consequences of Antitrust Policies on Small Firms

Thursday, June 6th 2024 | 1:00 pm | room 305 | online

Manipulating Growth: The Unintended Consequences of Antitrust Policies on Small Firms

Gustavo Grullon – Jones Graduate School of Business, Rice University (U.S.A.)

"Recent evidence indicates that acquirers avoid antitrust regulatory scrutiny by targeting firms whose size fall below exemption thresholds. We find evidence that potential targets near these thresholds intentionally reduce their size, which makes them more attractive targets for stealth acquisitions. They achieve this by limiting asset growth and increasing their payouts when they have excess cash. Our results indicate that this effect is especially pronounced for firms with liquidity needs and is driven, in part, by exit strategy motives. Overall, our results reveal that antitrust exemptions can create perverse incentives that can offset public policies aimed at promoting the growth of small firms."

Any questions please contact cefup.sec@fep.up.pt.


Cef.up is financed by Portuguese public funds through FCT - Fundação para a Ciência e Tecnologia, I.P., in the framework of the project with reference UIDB/04105/2020