ABSTRACT

Whilst agreements amongst independent firms were effectively outlawed in 1956, the merging of firms was in no way limited up to 1965, and after 1965 subject to only rather limited restriction (as indicated below). Thus incentives towards mergers are thereby increased concentration were created. The evidence on this aspect is mixed. Elliot and Gribbin (1977) were able to investigate the changes during the years 1958 to 1968 in industries in which there were products on which agreements had been terminated with industries in which there had not been any agreements. Their results, summarised in Table 16.2, suggest a faster rise in concentration following the termination of an agreement than in those industries where restrictive practices had not operated.