The Global Diffusion of Antitrust and Merger Control

The core idea of institutional theory is that social institutions, such as rules, networks, culture, and conventions that govern business dealings, are necessary for markets to operate. The lack of institutional frameworks that govern business transactions hinders intercountry spaces because these institutions are mainly established and operate within national borders. This argument is in sharp contrast to those favouring deregulation, which maintain that market integrations can happen by eliminating current regulations rather than passing new ones. My empirical research really shows that when antitrust laws and merger controls are enacted, adopting nations observe an increase in the number of incoming cross-border mergers and acquisitions. By informing adopting countries that they uphold international norms for market-oriented reforms, antitrust laws promote foreign acquisitions. Merger control streamlines foreign acquisitions by giving purchasing corporations in adopting nations clarity on otherwise unclear legislation.