Prosecution and Leniency Programs: a Fool's Game

We present a model where the Antitrust Authority is privately informed about the strength of the case against a given cartel. In this context, the Antitrust Authority may obtain cartel members' confessions even when it opens an investigation knowing that it has no chance to find hard evidence. More generally, we show that offering leniency allows to raise the conviction rate, which in turn enhances cartel desistance and cartel deterrence. A second contribution of the paper is to show that the optimal leniency scheme involves a single informant rule. That is, amnesty should be given only if a unique cartel member reports information

Are Executives in Short Supply? Evidence from Deaths’ Events

Using exhaustive administrative data on Italian social security records, we construct measures of local labor market thickness for executives that vary by industry and location. We show that firm performance is strongly and persistently affected by executive death, but only in thin local labor markets. The new executives hired after death events in thin local labor markets have lower education levels and are more likely to be replaced. These predictions are consistent with a simple model of executive search in which market thickness determines the arrival rate of applications for executive positions

Input Specificity and the Propagation of Idiosyncratic Shocks in Production Networks

This article examines whether firm-level idiosyncratic shocks propagate in production networks. We identify idiosyncratic shocks with the occurrence of natural disasters. We find that affected suppliers impose substantial output losses on their customers, especially when they produce specific inputs. These output losses translate into significant market value losses, and they spill over to other suppliers. Our point estimates are economically large, suggesting that input specificity is an important determinant of the propagation of idiosyncratic shocks in the economy

Are executives in short supply? Evidence from death events

Using exhaustive administrative data on Italian social security records, we construct measures of local labour market thickness for executives that vary by industry and location. We show that firm performance is strongly and persistently affected by executive death, but only in thin local labour markets. The new executives hired after death events in thin local labour markets have lower education levels and are more likely to be replaced. These predictions are consistent with a simple model of executive search in which market thickness determines the arrival rate of applications for executive positions

Essays in corporate finance and competition policy

Cette thèse comporte quatre essais en finance d'entreprise et politique de concurrence. Le chapitre 1 s'intéresse à l'interaction entre la discipline exercée par les acquisitions et le niveau de tangibilité des actifs des entreprises. Les résultats empiriques convergent pour montrer qu'un affaiblissement de la discipline exercée par les acquisitions (mesuré par la présence de défenses ou de lois anti-OPA) a un effet négatif seulement sur la performance des entreprises intangibles. Cela suggère que la dette exerce un effet disciplinaire sur les managers des entreprises tangibles. L'étude empirique menée dans le chapitre 2 montre que le degré d'indépendance des cadres dirigeants vis-à-vis du Directeur Général a un impact positif sur la performance des entreprises et la qualité des décisions prises par le management. Les deux derniers chapitres s'intéressent à la politique de lutte contre les ententes et aux programmes de clémence. Dans le chapitre 3, je présente un modèle théorique dans lequel l'autorité de la concurrence détient de l'information privée concernant la qualité des preuves initiales contre une entente. Je montre que l'introduction d'un programme de clémence permet alors à l'autorité de la concurrence de condamner une entente même quand les preuves initiales contre les entreprises sont faibles. Le dernier chapitre étudie l'impact des programmes de clémence sur l'effort exercé par l'autorité de la concurrence lors des enquêtes.This thesis consists of four essays in corporate finance and competition policy. Chapter 1 focuses on the interaction between takeover discipline and asset tangibility. I show that higher takeover vulnerability (measured through takeover defenses and antitakeover laws) is associated with higher performance only in intangible firms. My favourite explanation is that tangible firms are already disciplined by debt. Chapter 2 empirically relates the internal organization of a firm with decision making quality and corporate performance. In a very robust way, firms with a smaller fraction of independent executives exhibit a lower level of profitability and lower shareholder returns following large acquisitions. The two last chapters focus on cartel policy and leniency programs. In chapter 3, I present a model in which the Antitrust Authority is privately informed about the strength of a cartel case. I show that the Antitrust Authority can then obtain confessions even when it has no chance of finding hard evidence. Chapter 4 studies the impact of leniency programs on prosecution effort

Import competition and household debt

We analyze the effect of import competition on household balance sheets using individual data on consumer finances. We exploit variation in local industry exposure to foreign competition to study households' response to the income shock triggered by China's accession to the World Trade Organization. We show that household debt increases significantly in regions where manufacturing industries are more exposed to import competition. The effects are driven by home equity extraction and are concentrated in areas with strong house price growth. Our results highlight the role played by mortgage markets in absorbing displacement shocks triggered by globalization

Essais en finance d'entreprise et politique de concurrence

Cette thèse comporte quatre essais en finance d'entreprise et politique de concurrence. Le chapitre 1 s'intéresse à l'interaction entre la discipline exercée par les acquisitions et le niveau de tangibilité des actifs des entreprises. Les résultats empiriques convergent pour montrer qu'un affaiblissement de la discipline exercée par les acquisitions (mesuré par la présence de défenses ou de lois anti-OPA) a un effet négatif seulement sur la performance des entreprises intangibles. Cela suggère que la dette exerce un effet disciplinaire sur les managers des entreprises tangibles. L'étude empirique menée dans le chapitre 2 montre que le degré d'indépendance des cadres dirigeants vis-à-vis du Directeur Général a un impact positif sur la performance des entreprises et la qualité des décisions prises par le management. Les deux derniers chapitres s'intéressent à la politique de lutte contre les ententes et aux programmes de clémence. Dans le chapitre 3, je présente un modèle théorique dans lequel l'autorité de la concurrence détient de l'information privée concernant la qualité des preuves initiales contre une entente. Je montre que l'introduction d'un programme de clémence permet alors à l'autorité de la concurrence de condamner une entente même quand les preuves initiales contre les entreprises sont faibles. Le dernier chapitre étudie l'impact des programmes de clémence sur l'effort exercé par l'autorité de la concurrence lors des enquêtes.This thesis consists of four essays in corporate finance and competition policy. Chapter 1 focuses on the interaction between takeover discipline and asset tangibility. I show that higher takeover vulnerability (measured through takeover defenses and antitakeover laws) is associated with higher performance only in intangible firms. My favourite explanation is that tangible firms are already disciplined by debt. Chapter 2 empirically relates the internal organization of a firm with decision making quality and corporate performance. In a very robust way, firms with a smaller fraction of independent executives exhibit a lower level of profitability and lower shareholder returns following large acquisitions. The two last chapters focus on cartel policy and leniency programs. In chapter 3, I present a model in which the Antitrust Authority is privately informed about the strength of a cartel case. I show that the Antitrust Authority can then obtain confessions even when it has no chance of finding hard evidence. Chapter 4 studies the impact of leniency programs on prosecution effort

Are leniency programs too generous?

I present a simple model of collusion in which the competition authority offers leniency rates contingent on the number of firms that report information. The optimal leniency policy involves what I refer to as a single informant rule - that is, leniency should be given only when a single firm reports information. The single informant rule allows to increase expected sanctions compared to the first informant rule, which overall improves cartel deterrence

Prosecution and Leniency Programs: a Fool's Game

We present a model where the Antitrust Authority is privately informed about the strength of the case against a given cartel. In this context, the Antitrust Authority may obtain cartel members' confessions even when it opens an investigation knowing that it has no chance to find hard evidence. More generally, we show that offering leniency allows to raise the conviction rate, which in turn enhances cartel desistance and cartel deterrence. A second contribution of the paper is to show that the optimal leniency scheme involves a single informant rule. That is, amnesty should be given only if a unique cartel member reports information.Antitrust law and policy; Cartels; Collusion; Self-reporting