Sasin Research Seminar - The Brussels Effect: Cross-Border Antitrust and Superstar Firms

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The Brussels Effect: Cross-Border Antitrust and Superstar Firms

By: Pramuan Bunkanwanicha, Dean of Faculty and a Full Professor of Finance, ESCP Business School Date: Friday, May 29, 2026 Time: 12.00-13.00 Venue: Room 201 at Sasin School of Management or online via Zoom Register here to reserve your seat Abstract: The Brussels Effect refers to the European Union’s ability to influence global regulatory standards by prompting non-EU firms to adjust their behavior in anticipation of European regulations. We test whether EU antitrust enforcement generates cross-border deterrence—the ‘Brussels Effect’ for U.S.-listed firms. Exploiting the initiation of the European Commission’s antitrust investigation into Google as an exogenous shock, we examine the behavioral responses of superstar firms not directly targeted by the investigation. Our findings reveal that firms facing heightened antitrust litigation risk strategically lower their markups and margins to mitigate their exposure to potential future regulatory scrutiny. These findings document a deterrence channel through which European antitrust enforcement generates cross-border spillovers, highlighting how international regulatory actions shape firm conduct, competitive dynamics, and market outcomes. JEL Classifications: L12, L13, K21, L40, L22, F23 Keywords: Brussels effect, Antitrust enforcement, Cross-border deterrence, Superstar firms, Markups.   For more information please contact +66-2218-4000 ext. 84095 or [email protected].