Impact of Antitrust Regulations on Firm Market Value : Evidence from Chinese and U.S. Internet Platforms

This study compares the impact of antitrust regulations on firm market value for Chinese versus U.S. internet platforms. Applying an event study approach to daily stock market data during 2010–2022, we investigate the cumulative abnormal returns of Hong Kong- and U.S.-listed internet platforms. We find that the launch of antitrust investigation in China has caused a significant decrease in the investigated firm’s market value but boosted the market value of their competitors, while the end of the investigation increases the investigated firm’s market value but dampens the market value of other leading platforms that involve the alleged exclusive dealing conduct. A similar analysis on U.S. internet platforms shows minor effects of EU/U.S. antitrust regulations, indicating that differences in enforcement duration and uncertainty of antitrust enforcement matter. Stronger stock market reactions to Chinese versus EU/U.S. antitrust legislation are also observed, suggesting investors’ belief in the Chinese antitrust authority’s stronger discretion in antitrust enforcement