Russian merger control: in favor of foreign companies?
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 9 December 2021
Issue publication date: 21 November 2023
Abstract
Purpose
The paper aims to reveal the attitude of the Russian competition authorities towards cross-border mergers involving foreign buyers. The study addresses the following question: Is the probability of Russian competition authorities' intervention significantly different when a foreign buyer takes part in the merger? This is the key test to reveal whether competition authorities gravitate towards “economic nationalism” or “promotion of foreign investments”.
Design/methodology/approach
The discrete choice model is applied to the dataset of 7,607 merger cases investigated by the Russian competition authorities between 2012 and 2017. The probability of competition authorities' intervention, such as merger correction by using remedies or deal rejection, is used as a measure of special attention.
Findings
The study finds out favoritism patterns of the regulator with regard to foreign companies. In particular, the deals involving a foreign buyer had less chance of intervention, i.e. imposition of remedies, from national competition authorities. The sanctions period does not moderate the probability of approval of a cross-border merger with foreign buyers by the Russian competition authorities.
Originality/value
The paper contributes to merger control literature by addressing the political economy issues. It discovers that, besides regulation by the law, there are hidden motives, such as protectionism or favoritism of foreign companies, which could drive the regulator's decision. Therefore, the studies of cross-border mergers provide an opportunity to investigate the political issues of merger control through the identification of a special attitude to foreign companies and analysis of regularities that might explain such a policy.
Keywords
Acknowledgements
The authors would like to thank the anonymous reviewers for their comments and suggestions. The authors gratefully acknowledge the support of Dr. Stripy.
Funding : This study comprises research fundings from the Project No. 18-18-00270 supported by the Russian Science Foundation.
Citation
Redkina, A., Molodchik, M. and Jardon, C. (2023), "Russian merger control: in favor of foreign companies?", International Journal of Emerging Markets, Vol. 18 No. 10, pp. 3802-3823. https://doi.org/10.1108/IJOEM-01-2021-0109
Publisher
:Emerald Publishing Limited
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