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Compliance with cartel laws and the determinants of deterrence – an empirical investigation

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ABSTRACT This paper empirically investigates the drivers of compliance to cartel law and deterrence properties of enforcement tools with conjoint firm-level online survey data from the Netherlands. Compliance is measured… Click to show full abstract

ABSTRACT This paper empirically investigates the drivers of compliance to cartel law and deterrence properties of enforcement tools with conjoint firm-level online survey data from the Netherlands. Compliance is measured by a response to varying hypothetical cartel scenarios. Respondents were asked to indicate the likelihood on a scale from 1 (lowest) to 10 (highest) that they would end a cartel that they discovered within their organization. The personal fine for the manager and the fine for the company have a statistically significant deterrent effect. Firm size, publicity following an infringement and the leniency program have no significant effect on compliance. For the most deterring scenario, the probability of a fully compliant outcome (defined as likelihood equal to 10) is estimated at .68. Self-reported knowledge of cartel law, having a compliance officer and the habit to consult a lawyer on competition law matters are statistically significant drivers of compliance.

Keywords: laws determinants; compliance; compliance cartel; cartel; determinants deterrence; cartel laws

Journal Title: European Competition Journal
Year Published: 2017

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