Canadian COMPETITION LAW

November 9, 2012

Guest contribution by Dr. Derek Ireland, Ottawa (djirel@sympatico.ca)

Introduction and Background

My 2008 PhD dissertation was on the interactions between India’s business groups and the country’s competition policies and laws over the past four decades.  Since then, I have continued my research on these interactions and the special challenges posed by state-owned and privately owned business and enterprise groups for competition authorities in emerging market economies as well as the more advanced OECD competition law jurisdictions.  My work on this question includes several articles, working papers and conference presentations.

There is little published material on competition law cases involving state-owned and privately owned enterprise and business groups located in emerging market economies.  Enterprise and business groups from emerging markets have been entering OECD country markets in a major way only in the past 10-15 years; and many emerging economies with large business group sectors such as India, China and Indonesia started to enforce their competition laws only in the past few years.  However, this situation could change dramatically in the future given the “going global” strategies of many emerging economy enterprise and business groups and the more than 80 developing and emerging market economies that now have competition laws and authorities (see e.g. Ireland 2008a and 2011a).

Therefore, OECD country competition authorities and other government agencies may soon be facing complex and less familiar competition and other issues and cases as privately owned or state-owned business groups and networks in emerging economies become more prominent and influential in many advanced economies through exports, greenfield investments, mergers and acquisitions, R&D partnerships and joint ventures, strategic alliances, and other mechanisms.

The CNOOC-Nexen Transaction

Canada is currently facing such a matter under its Investment Canada Act.  This matter involves the proposed CAD 15.1 billion acquisition of Nexen by CNOOC: the China National Offshore Oil Corporation.  Nexen is a comparatively smaller privately owned Canadian oil and gas producer and participant in the oil sands and the Canadian and global oil and gas markets.  Nexen is located in the Canadian province of Alberta.

CNOOC is a large and quite diversified state-owned corporation/enterprise group that is involved in a large number of products, services and markets.  CNOOC was established by the Government of China soon after the start of the reform period in 1982 in order to exploit offshore oil and gas resources.  This state-owned corporate entity has many of the attributes of an enterprise group.  While CNOOC largely focuses on the oil and gas sector, the corporation now has six business sectors, including exploration and development of oil and gas, technical services, logistics services, chemicals and fertilizer production, natural gas, power generation, and financial services and insurance.  The Government of Canada has recently announced that a decision on this transaction will be delayed for a month and is now expected to be provided in the middle of December 2012.

The CNOOC acquisition of Nexen is a “friendly” takeover, which has already been approved by the Nexen shareholders apparently because of the large premium over the current market valuation of the company. It is reported that the Nexen purchase represents China’s largest overseas acquisition to date and the first time that a Chinese state-owned enterprise has attempted to fully acquire a Canadian oil and gas producer.

As a consequence, this acquisition represents and important benchmark and unfamiliar territory for all of the company and government players that are involved in the transaction in Canada and China.  The federal government decision under the Investment Canada Act will provide an important precedent that will strongly influence future transactions and related commercial relationships between Canadian and Chinese companies and between our two economies.

Insights for Future Mergers
and Other Competition Law Cases

While subject to Competition Bureau and Investment Canada review, the focus of this transaction has been on the Investment Canada Act review.  Canadian debates on applying the “net benefit test” and national security considerations under the Investment Canada Act to this transaction, and a previous unsuccessful attempt by CNOOC to purchase an American oil company Unocal, have raised a number of difficult issues that could be relevant to the review of future mergers and other competition law cases in the OECD jurisdictions that would involve state-owned enterprises and enterprise groups from emerging market economies.

My recent research suggests that some of these issues could also be relevant to transactions and other competition matters that involve privately owned business groups and networks from emerging economies (see e.g. Ireland 2011a).    These issues include the following:

1.  Differences in competition, corporate governance, foreign investment, environmental, labour and other marketplace laws, regulations and rules – as well as in the enforcement of and compliance with these laws, regulations and rules — between the Canadian and Chinese economies.

2.  Reciprocity of treatment, in particular whether a Canadian (or other OECD country) business can enter and compete in the same markets, industries and lines of business in the emerging market economy through imports, greenfield investment, acquisition, joint venture, strategic alliance or other methods. [1]

3.  The corporate motivations, objectives, structures, and governance practices, soft or hard budget constraints, and extent of dependence or independence from government investors, shareholders and owners, of a state-owned enterprise and group compared with a privately owned corporate entity.   

4.  The structures (arms-length commissions, holding companies, enterprise groups etc.) that have been established by governments to oversee their wholly and partially owned enterprises and to carry out the their fiduciary and other ownership responsibilities; as well as the often more informal and less transparent interactions and relationships between SOEs and other government and political entities (see e.g. Zhang 2012:7-9);   

5.  And what these attributes, differences and government structures imply for the future competition, innovation, corporate governance and related conduct and strategies of an emerging economy state-owned enterprise or group that is entering an OECD economy for the first time through merger and acquisition or other mechanisms.

These considerations, especially reciprocity of treatment, could be particularly important in a competition law case for assessing whether the emerging economy SOE, enterprise group or other acquirer is disciplined by the same or similar market and commercial forces, incentives, disciplines, competition, corporate governance and other rules, constraints and “learning” as the target company and other competitors in the same or similar industries and markets in the Canada and other OECD economies.

When the rules, incentives, disciplines and market and institutional contexts are fundamentally different, competition and other authorities can learn very little from the enterprise’s and group’s past history and conduct.

The ability of an emerging economy enterprise or group to enter a foreign market when its home market is protected from foreign entry and free competition can potentially provide the foundation, motivation and ability for successful price predation and related anticompetitive strategies in the foreign market by a state-owned or privately owned business group with deep pockets, a soft budget constraint and preferred access to internal and external “patient capital” and government support and protection (see Ireland 2011a).  For similar reasons, the threat of predatory conduct, dumping and other questionable business practices by Japanese business groups and enterprises was a major issue in the United States-Japan trade policy frictions and conflicts and the “Structural Impediments Initiative” negotiations and agreement in the late 1980s and early 1990s (Lawrence 1991 and Morita 1991).

As noted earlier, if the state-owned or privately owned enterprise or business group has only competed in their own or other highly protected emerging economy markets in the past, the competition authorities and other regulators have no empirical evidence regarding how the acquirer and merged entity would in fact function and compete in a more open and competitive market – except for the stated commitments of the enterprise or business group acquirer that the merged entity will be a “good corporate citizen” and comply with the competition, corporate governance, intellectual property and other laws and regulations of the host country.  It is reported that representatives of CNOOC and the Chinese government have made such commitments to Canadian governments and the media during the summer and autumn of 2012.

More Specific Considerations Important
to Chinese SOEs and Groups

Whether CNOOC or other Chinese SOEs compete in the Chinese market depend on a number of other factors that will be specific to each SOE, merger, or other competition law case.  There is a higher probability that the company is competing with other SOEs and private domestic and foreign firms in the Chinese and non-Chinese markets if the SOE: (i) has been commercialized and “corporatized” and is more independent from government; (ii) has both government and non-government investors and owners including retail investors and foreign firms that are equity partners; (iii) is being traded on Chinese, Hong Kong, or other stock exchanges; and (iv) has joint ventures, strategic alliances and other arrangements with foreign firms;

In addition, if the Chinese SOE is still fully government owned but is commercialized and is competing in the same Chinese market with other SOEs that report to and/or have past and current linkages with different government entities or with SOEs owned by other levels of government, these Chinese markets could still be quite competitive even though many participants are state-owned enterprises and group.  During his work in China over a 17-year period from 1991 to 2007, the author found that Chinese enterprises, governments, other entities and individuals are often highly competitive and entrepreneurial.  As a result, SOE dominated markets can also be quite competitive in terms of price, product quality and other attributes.  This can be particularly true when the SOEs are owned by different provincial and municipal governments.

For example, China has four major banks, the Bank of China, the China Construction Bank, the Industrial and Commercial Bank, and the Agricultural Bank.  All are still state-owned, but have some autonomy from government, have past and current links and relationships with different Ministries and other government entities in Beijing, and traditionally have had different histories, mandates and target markets.  However, in recent years, the overlaps in mandates, financial products and markets are expanding, and therefore, the four commercial banks are increasingly competing for the same or similar business from government, non-financial SOEs, private sector clients and financial consumers (see e.g. World Bank 2009).

If in the future, two of China’s state-owned banks decided to move into the Canadian market through purchasing and acquiring control of two of our major banks, computing the post-merger market shares and assessing the extent of competition in the post-merger market would not be straightforward, in part because of the “single entity” question discussed below.  However, based on their expanding autonomy and growing competition in the Chinese market and perhaps in foreign markets in the future, a case could and likely would be made that the two merged Canadian banks after Chinese SOE bank ownership would still be independent competitors in the Canadian market.  But all of this would be specific to the competition case, time of the transaction, the market context, and the evolution of the banking sector and financial markets in China.

Similar autonomy, control, market share and post-merger competition issues would arise if one of the rapidly expanding Chinese motor vehicle companies were to purchase one of the larger American, Japanese or South Korean motor vehicle assemblers.  In terms of ownership and enterprise and market structure, the current Chinese motor vehicle industry is much more diverse and more competitive than the country’s banking sector.  The automotive sector encompasses a large number of producers — and arguably too many producers with too much capacity. The sector encompasses companies that developed out of the traditional state-owned enterprises, generally newer domestic private firms such as Geely and Great Wall Motors, as well as joint ventures with foreign car makers including Volkswagen, General Motors, Hyundai, Nissan, Honda, Toyota, and Mitsubishi (see e.g. Tang 2009).

The joint ventures reportedly account for over 50% of motor vehicle production in China.  In an industry characterized by over capacity, too many producers, vigorous competition and substantial consumer choice, the SOE car manufacturers have likely had to become increasingly independent, efficient and competitive in order to survive.  It would be folly to presume in a Chinese or foreign competition case that the SOEs in this and likely many other PRC industries act as a single entity because their investment, competition and other strategies are dictated and controlled by a single government “owner” (however defined) based in Beijing (see e.g. Zhang 2012, Gudofsky et al 2012, and OECD 2009).

In contrast, the single entity approach discussed below could have validity for mergers and other competition law cases when the SOE acquirer is a member of a truly strategic industry in China or elsewhere, wherein all participants are wholly owned by the same government, report to the same holding company, enterprise group, commission or other government entity, and SOE autonomy and competition is not obvious and probable based on the available evidence.  At the very least, under these market conditions, the SOE acquirer should have the responsibility to provide credible evidence on SOE independence and competitive conduct in the relevant home market in the emerging economy.

The competition law and literature indicates that the crucial issue in merger review and other competition law cases is not ownership but rather control.  On the one hand, an individual or company can be a minority shareholder and possess e.g. less than 10% of the equity of a merged entity but still fully control the merged entity’s post-merger conduct (see e.g. O’Brien and Salop 2000).  This is an important point made by Randall Morck and others when discussing the corporate governance problems with enterprise and business groups that have highly hierarchical “pyramidal” structures.

On the other hand, the Government of China could be the major or sole owner of two state-owned enterprises operating in the same market, but if the two companies have significant autonomy from government and their managers are independent of or ignore their government owners or report to different ministries and levels of government, these two SOEs could be major competitors and aggressive rivals against each other and thereby promote competition and consumer welfare.  These issues are further discussed in the next section.

Competition Law Implications of Advantages
and Other Attributes of State-Owned and Other Enterprise and Business Groups

The recent literature on state-owned enterprises and enterprise groups as well as privately and family owned business groups and conglomerates and other enterprise structures in emerging economies provides additional insights that can be helpful to competition, foreign investment, corporate governance and other regulators in both OECD and emerging economy jurisdictions.

The enterprise and business group literature indicates that many of these entities have complex objective functions designed to achieve multiple and often conflicting enterprise goals and objectives and the needs of various “principals”/stakeholder groups.  Therefore, many of these enterprises and groups do not follow the corporate governance “model” of maximizing profits and shareholder value that arguably is the “norm” for corporations in the more advanced OECD economies (see e.g. Ireland and Kofler 2012).

Depending on the enterprise, group, country, market and institutional context, enterprise goals and objectives can go beyond maximizing profits and shareholder value during the next quarter to include: long-term survival; building capacity, revenues and the customer base over the long run; creating and maintaining jobs and achieving other economic and social goals of the government owner and/or “protector”; satisfying the social norms, values and preferences of enterprise leaders, senior managers and key employees; and building a national and international reputation for corporate social responsibility, industry leadership, and complying with laws, regulations and ethical norms.

The next and related issue is the extent to which complex objective functions — when combined with the preferred access of state-owned and other “privileged” enterprises in emerging economies to patient capital, other key intermediate inputs and “essential facilities”, and government protection and support — will more often result in anticompetitive conduct and outcomes in their home markets as well as in the OECD economy markets where these enterprises and groups have become major players.

On the one hand, Sappington and his colleagues (see e.g. Sappington and Sidak 2003a and 2003b and Geddes 2008) contend that, because of their complex objectives function, many advantages and other attributes, state-owned enterprises and groups are more likely to implement anticompetitive strategies.  Deep pockets and preferred access to patient capital, other inputs and government protection and support can provide the foundation for predatory pricing, raising rivals costs, other unilateral strategies and effects, and more profitable, stable and enduring cartels, tacit collusion and other coordinated conduct.

In addition, multiple goals and principals and the limited oversight by government owners can provide overly confident and risk seeking SOE senior managers with career ambitions to build their reputations through questionable and reckless merger and acquisition, predation, entry deterrence and other anticompetitive strategies designed to build their reputations for action and strong leadership.  Sappington and Sidak (2003a:184) conclude that compared with enterprises focused solely on maximizing profits, state-owned enterprises that are less concerned with short-term profits are more likely to conduct activities that disadvantage competitors and harm competition and consumers.

On the other hand, these same advantages and attributes can provide the foundation for: (i) countervailing buyer power when the state-owned enterprise or group is purchasing from a concentrated market; and (ii) buying market share, innovation and related pro-competitive strategies that are designed to establish a stronger and more loyal customer base, and strengthen the SOEs reputation as a vigorous and effective competitor, and in some contexts a “maverick producer” (see e.g. Thomas and Kamp 2006).

Therefore, market and institutional context and the stage of economic and institutional development are important to assessing and determining competitive and anti-competitive conduct and outcomes in assessing merger and other cases that involve state-owned enterprises and state and privately owned business groups and conglomerates that are located in emerging market economies (Ireland 2011a).

In addition, when SOEs from some emerging economies are operating in a foreign country, they may be under even greater pressure than a privately owned enterprise to comply with competition, corporate governance, intellectual property, and other laws and regulations and to develop a reputation for corporate social responsibility and being a “good corporate citizen”.  This is because failure to comply with the laws, regulations and more informal business norms and rules of business conduct of the “host” economy could result in loss of reputation, prestige and “face” for not only the state-owned enterprise but as well for the home country government that (actually, presumably or nominally) owns and controls the enterprise.

Finally, behavioral antitrust and related literatures indicate that overconfident state-owned enterprises and their senior managers operating in unfamiliar advanced economy markets could implement poorly designed and analysed price predation and related strategies that are complete failures for the SOEs and their government owners, while providing business customers and consumers with lower prices for an extended period (Ireland and Kofler 2012).

In summary, when state-owned enterprises and enterprise groups located in emerging market economies are involved with a merger or other competition law case in OECD or other competition law jurisdictions, the conventional case specific evidence based approach should be applied to all cases.  Competition law principles and standards that are specific to and would be applied to all state-owned enterprises and groups should be avoided by individual competition authorities and the international competition law community.

The “Single Entity” Debate

In particular, the single entity method whereby all SOEs owned by a national or sub-national government are considered to be a single enterprise would be inconsistent with the evidence and market and competitive realities in many relevant markets where SOEs are major players.

Based on recent European Union merger and other cases and the recent literature on SOEs, the single entity question is whether all enterprises owned wholly or in large part by a particular national or sub-national government should be considered as a “single entity” for purposes of merger review and other competition law cases – unless there is strong evidence that the enterprises are totally immune from actual or potential government meddling, influence and control.

As argued very well by Zhang 2012 and Gudofsky et al 2012, applying the simple single entity “rule of thumb” standard and approach in for example: (i) industries and markets where SOEs are smaller competitors; and (ii) the single entity standard does not have a major impact on competitive effects and outcomes and competition policy and law decisions; can establish unfortunate precedents and case law that can discourage foreign direct investment by SOEs in Canada and other OECD economies

These two articles indicate that misapplying the single entity approach to SOEs can result in either:

1.  Type I errors/false positives in the future, including discouraging or blocking an efficiency enhancing merger or other arrangement that involves an SOE, or wrongly presuming cartel or other coordinated conduct and effects when state-owned enterprises and groups are important competitors in relevant markets; and/or,

2.  Type II errors/false negatives through clearing before any investigation mergers and other questionable arrangements and conduct because they are deemed to be internal to this “single entity” however this is defined – as a conglomerate, enterprise group, single undertaking and so on.

As argued very well by Zhang (2012):

“While the [European] Commission has yet to take a position on the independence of Chinese SOEs, it should take into account the costs and benefits of its position in future cases. If Chinese SOEs in the same sector are treated as part of a single entity, agreements as well as mergers between them would arguably be exempted from EU competition law. On the other hand, the single entity theory could also be used as a sword to impute the antitrust liabilities of one Chinese SOE to other Chinese SOEs, thus greatly escalating the level of the fine imposed. In any event, the Commission must avoid using double-standards in applying single entity theory to cases involving Chinese SOEs” (Zhang 2012:21).

In the view of these and many other authors, a less simplistic and nuanced approach is needed by competition and other authorities to assess the extent to which the SOEs owned totally or partially by a national or sub-national government are truly under the control of the relevant government.  This approach would recognize that the extent of government control is a continuum from (i) at one end the SOE is essentially an instrument of the state at one end; to (ii) complete independence from the state on the other end.[2]  The areas between these two extremes are probably more frequent and therefore would require additional case and market specific analysis by competition authorities and other regulators.

Total independence from the government “owner” is not needed for the SOE to adopt and implement investment, innovation and competition strategies that are similar to those of privately owned enterprises that are operating in the same or similar market, policy, legal, regulatory, political and institutional context.  This more nuanced approach would therefore place less weight on ownership and more on the market, political and institutional context and would recognize that in some contexts privately owned firms can also be under the same or similar influence and control of the state, with similar consequences for competition analysis, effects and outcomes.

Whether a cartel is the result of government control over its SOEs or results from government protection and support for a private cartel that is deemed to be a “national champion”, the competition analysis and adverse competitive effects are essentially the same.

It could be argued as well that on strategic issues, a government that is not currently exercising control over its enterprise could use its ownership when needed to influence the SOE in a “strategic” manner that could be contrary to Canada’s interests.  However, a government like China with strong economic powers and the will to use them could exercise the same strategic control “when needed” over a privately owned Chinese enterprise operating in Canada. Private business groups and enterprises could be facing similar government pressures on strategic issues in other BRICS and emerging economies such as India, Indonesia, Brazil and Russia (see e.g. Gudofsky et al 2012).

Competition and other authorities would need to assess the risk of infrequent and strategic government influence on the SOE and its potential anticompetitive and other effects, based on e.g. past history and evidence from other sources (Zhang 2012).

The Historical, Institutional, and Market Context

As indicated by the Nexen/CNOOC case, Canada’s competition, foreign investment, corporate governance and other regulators should particularly focus on the progress and limitations of the enterprise reform process in China.  The Government of China has made a number of important state-owned enterprise reforms over the past two decades.  These reforms, which are designed to provide a more balanced and “modern” approach between SOE autonomy and the oversight and fiduciary duties of government owners and shareholders, include the following.

1.  Restructuring, closing and/or partially or fully privatizing many of the small and medium sized SOEs in the less strategic industries, in order to improve efficiency and reduce over-capacity in some sectors, and reduce the “span of control” of national, provincial and local governments.

2.  Applying a Chinese version of the chaebol and keiretsu models of South Korea and Japan in order to bring together individual SOEs into (hopefully) more independent, better managed, and more efficient and competitive enterprise groups and SOEs.

3.  The creation of State Asset Supervision and Administration Commissions (“SASAC”) by the Chinese government as well as by provincial and local governments where needed, in order to separate the government’s social and public management functions from their role as investor in state-owned assets (Zhang 2012:6).

4.  Allowing and in many ways encouraging many state-owned enterprises and enterprise groups to: sell shares to retail and institutional investors in national and international stock markets, accept equity investment from privately owned domestic and foreign corporations, conduct mergers and acquisitions in China and foreign markets, and establish joint ventures, strategic alliances, R&D and other partnerships and other arrangement in China and other countries.

The reasons for and expected outcomes and benefits from these and related enterprise reforms are numerous and complex.  They are intended to enhance SOE independence, discipline, accountability, management capabilities and skills, and reputations in Chinese and foreign markets as modern, vigorous and effective competitors and good “corporate citizens”.  They are intended as well to improve the access of SOEs, enterprise groups and the Chinese economy more generally to financing, natural resources, key commodities, managerial capabilities, and other hard and soft assets in developing and more advanced OECD economies.

Finally, as noted above, these reforms are designed to strike the “right balance” between SOE independence, efficiency and competitiveness, and the oversight and fiduciary responsibilities of the Chinese government owners that are needed to minimize corruption, rent seeking, principal-agent problems and other corporate governance problems that are emphasized in the extensive SOE corporate governance literature.

Similar enterprise reform programs are being implemented in Viet Nam and some other transition economies.  The literature on the Chinese enterprise reforms provides mixed results on impacts, benefits, costs and related outcomes, which appear to vary depending on the enterprise group, Chinese government, industry and other parameters.

However, the theoretical and empirical literature on Chinese SOEs and SOEs more generally, when combined with (i) the strong growth experienced by the Chinese economy over the two decade period when these reforms were implemented, and (ii) the growing interest of governments and companies in Canada and other OECD economies in attracting investment from and establishing arrangements with China’s SOEs and enterprise groups, suggest that the outcomes on balance may be more positive than is argued by the harsher critics of the Chinese economy and the PRC government’s enterprise reform efforts.

The enterprise and business group literature indicates for example that China’s SOES and enterprise groups are effectively addressing, mitigating and capitalizing on the many ownership, property rights, legal, regulatory and other institutional and related gaps, deficiencies, complexities, ambiguities and “paradoxes” that remain in the Chinese economy (see e.g. Wu 1990, Smyth 1999, Ghosh and Whalley 2000, Xu 2000, Chen 2002, Yiu et al 2005, Motohashi 2005, Ma et al 2006, Zhuang 2006, Wang and Xiao 2006, Sutherland 2007, Carney et al 2009, and Hobdari et al 2010).[3]

Selected Bibliography

Carney Michael, Daniel Shapiro and Yao Tang (2009) “Business group performance in China: Ownership and temporal considerations” Management and Organization Review 5 (2): 167-193

Chen Ming-Jer (2002) “Transcending Paradox: The Chinese “Middle Way” Perspective” Asia Pacific Journal of Management, 19, 179–199, 2002

Geddes R. Richard (2008) “Pricing By State-Owned Enterprises: The Case of Postal Services” Managerial and Decision Economics 29: 575–591

Ghosh Madanmohan and John Whalley (2000) “State-Owned Enterprises, Shirking and Trade Liberalization” Working Paper 7696 http://www.nber.org/papers/w7696 NBER Working Paper Series National Bureau of Economic Research Cambridge, MA 02138 May 2000

Gudofsky Jason, Joshua Krane and Aleksandra Petkovic (2012) “State-owned Enterprises: Strategic Considerations for Merger Control and Foreign Investment Review in Canada” Blakes (Blake, Cassels & Graydon LLP) Toronto, Ontario, Canada

Hobdari Bersant, Evis Sinani, Marina Papanastassiou and Robert Pearce (2010) “The Determinants of Global Integration Strategies of Chinese Multinationals — Some Empirical Evidence” Review of Market Integration Vol. 2: 61-86

Ireland Derek (2008a) India’s Competition Regimes and Informal Business Institutions: Interaction, Conflict and Accommodation PhD Dissertation, School of Public Policy Carleton University, Ottawa Canada December 2008

Ireland Derek (2008b) “Implications of the BRIC Economies for Canadian Trade and Investment: Final Paper” Prepared for the Canadian Competition Policy Review Panel, March 14, 2008

Ireland Derek (2011a) “Business Groups and Competition Policy and Law: Some Conjecture and Theory but So Little Evidence and Practical Experience” Working Paper Presented to the Canadian Law and Economics Association Annual Meeting on September 23-24 2011 (forthcoming in the Journal: Developing World Review on Trade & Competition Vol. 1 (2) 2012)

Ireland Derek (2011b) “Competition Policy and Law in Asia’s Emerging Markets: Similar Goals, Objectives and Content but Different Priorities, Approaches, and Decisions?” Working Paper for the CASA Conference 2010 Ottawa October 28-31 Current Version Completed in March 2011

Ireland Derek and Gernot Kofler (2012) “Behavioral Economics and Competition Policy and Law in Emerging Market Economies” Presented to the Canada Law and Economics Association Conference in Toronto Canada, September 28-29 2012 Version 4: October 2012

Lawrence Robert Z. (1991) “Efficient or Exclusionist?” The Import Behaviour of Japanese Corporate Groups” Brooking Papers on Economic Activity 1:1991 pp. 311-341

Morita Mark K. (1991) “Structural Impediments Initiative: Is It An Effective Correction of Japan’s Antimonopoly Policy?” University of Pacific Journal on International Business Law 12(4): 777-809

Morck, Randall (2005) “How to Eliminate Pyramidal Business Groups: The Double-Taxation of Intercorporate Dividends and Other Incisive Uses of Tax Policy” Tax Policy and the Economy Vol. 19, pp. 135-179

Morck Randall, Daniel Wolfenzon and Bernard Yeung (2005) “Corporate Governance, Economic Entrenchment, and Growth” Journal of Economic Literature Vol. XLIII, September 2005, pp. 655-720

Motohashi Kazuyuki (2005) “IT, Enterprise Reform and Productivity in Chinese Manufacturing Firms” RIETI Discussion Paper Series 05-E-025

O’Brien, Daniel and Steven Salop (2000) “Competitive Effects of Partial Ownership: Financial Interest and Corporate Control,” Antitrust Law Journal, 67:559

Sappington David E.M. and J. Gregory Sidak (2003a) “Competition Law for State-Owned Enterprises” Antitrust Law Journal Vol. 71:479-523

Sappington David E.M. and J. Gregory Sidak (2003b) “Incentives for Anticompetitive Behavior by Public Enterprises” Review of Industrial Organization Vol. 22, Issue 3, May 2003, pp 183-206

Smyth Russell (1999) “Should China be promoting Large-scale Enterprises and Enterprise Groups?” Monash University Australia Department of Economics Discussion Papers ISSN 1441-5429 No. 01/99

Sutherland Dylan (2007) “China’s “National Team” of Enterprise Groups: How Has It Performed” The University of Nottingham China Policy Institute Discussion Paper 23 July 2007

Tang Rachel (2009) “The Rise of China’s Auto Industry and Its Impact on the U.S. Motor Vehicle Industry” Analyst in Industrial Organization and Business Congressional Research Service November 16, 2009

Thomas Christopher R. and Brad P. Kamp (2006) Buying Market Share: Agency Problem or Predatory Pricing Review of Law and Economics, 2(1): 1-24

Wang Kun and Xing Xiao (2006) “Ultimate Controlling Structures and Firm Value: Evidence from the Chinese Listed Companies” School of Economics and Management Tsinghua University, Beijing, PRC January 2006

World Bank (2011) “China FSA: Financial Sector Assessment” FSAP: Financial Sector Assessment Program A Joint Initiative of the World Bank and the IMF SecM2011-0491 November 2011

Wu Changqi (1990) “Enterprise Groups in China Industry” Asia Pacific Journal of Management Vol. 7 No. 2 pp. 123-136

Whalley John and Shunming Zhang (2006) “State-Owned Enterprise Behaviour Responses to Trade Reforms: Some Analytics and Numerical Simulation Results Using Chinese Data” NBER Working Paper Series # 12780 http://www.nber.org/papers/w12780 National Bureau of Economic Research December 2006

Xu, Lixin Colin (2000) “Control, Incentives and Competition: The impact of reform on Chinese state-owned enterprises” Economics of Transition 8(1): 151-173

Yiu Daphne, Garry D. Bruton and Yuan Lu (2005) “Understanding Business Group Performance in an Emerging Economy: Acquiring Resources and Capabilities in Order to Prosper” Journal of Management Studies 42(1): 183-206 January 2005

Zhang, Angela Huyue (2012) “The Single Entity Theory: An Antitrust Time-Bomb for Chinese State-Owned Enterprises?” forthcoming in the Journal of Competition Law and Economics

Zhuang, Guotu (2006) “Trends of Overseas Chinese Business Network in East Asia: As Mirrored from Overseas Chinese Investment in Mainland China since 1978” Ritsumeikan International Affairs Volume 4, pp. 1-23

Please contact Dr. Derek Ireland at djirel@sympatico.ca if readers would like to receive copies of his working papers and other articles and presentations on competition policy and law in emerging market and other economies.

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