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tag=1 data=Local Government Policy tag=2 data=Hickey, Maggie tag=3 data=Territory Labor - Party Policy tag=6 data=^d ^mJune ^y1997 tag=8 data=POLITICAL PARTIES-ALP%LOCAL GOVERNMENT tag=10 data=Local Government Policy for election 1997. tag=15 data=POL ; Local Government Policy for election 1997.

Abstract. It has long been thought that government antitrust policy has an effect on aggregate merger and acquisition activity, but the empirical support for this hypothesis has been weak and inconsistent. This paper uses a new empirical specification and a new dataset on mergers and acquisitions to provide support for this conjecture. Regression analysis shows that government policy has a significant influence on mergers and that the nature of the effects depends on the type of merger. Fitting the time series into a two-state Markov switching model shows that conglomerate and horizontal time series follow different dynamics for the last half century, which is most likely caused by the dissimilar treatment of the two types of merger by the government. Only the conglomerate merger and acquisition time series is well described by a two-state Markov switching model. In contrast, the horizontal time series has a break in the early 1980s that may be attributed to the dramatic change in government policy. I am indebted to Professor Frank Gollop, Professor Christopher Baum, and Dr. Robert