The Gradual Impact of Sanctioning Cartels on Market Competition: Evidence from the Colombian Manufacturing Sector
| Title: | The Gradual Impact of Sanctioning Cartels on Market Competition: Evidence from the Colombian Manufacturing Sector |
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| Format: | Working Paper |
| Publication Date: | September 2023 |
| Published In: | Research Square |
| Publisher | Research Square |
| Description: | This paper investigates how fines on hard-core cartels affect market competition in Colombia. We use data from the national department of statistics and the competition agency, which covers 10,316 firms in the manufacturing sector from 2012 to 2020 and a panel of 67,671 observations. We measure market competition by the complement of the Lerner index and an indicator variable to account for the variation in the timing and sectors of the fines. We apply a difference-in-differences (DID) approach with multiple periods based on Callaway and Sant’Anna (2021) and perform robustness tests with Gardner (2021) and by incorporating anticipation effects. Our results show that the fines had a positive and gradual impact on market competition, implying that they deterred cartel behavior but also that some tacit collusion and price inertia persisted over time. |
| Ivan Allen College Contributors: | |
| External Contributors: | Juan David Gutierrez |
| Citation: | Sergio Pelaez, Juan David Gutiérrez. The Gradual Impact of Sanctioning Cartels on Market Competition: Evidence from the Colombian Manufacturing Sector, 06 September 2023, PREPRINT (Version 2) available at Research Square [https://doi.org/10.21203/rs.3.rs-2928151/v2] |
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