How does a corporate leniency program affect cartel stability? Empirical evidence from Korea

Yun J. Choi, Kyoung S. Hahn

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

This article examines the impact of Korea's corporate leniency program on cartel stability by applying a semi-parametric hazard model to a unique data set of 619 discovered cartels.We find that, in the short run, the introduction and revision of leniency reduced a cartel dissolution rate and resulted in longer cartel duration. However, in the long run, the introduction of leniency increases the cartel dissolution rate and decreases cartel duration. As a consequence of the leniency program, the Korea Fair Trade Commission's enforcement on cartels has become more effective. These results provide empirical evidence of the effectiveness of full leniency with respect to the first applicant and also have some policy implications for the revision of the leniency program.

Original languageEnglish
Article numbernhu026
Pages (from-to)883-907
Number of pages25
JournalJournal of Competition Law and Economics
Volume10
Issue number4
DOIs
Publication statusPublished - 2014 Dec 1

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All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Law

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