make it more difficult for new competitors to enter a market which can be a pressure on cartels.

Contrary to the predictions of the theoretical hypothesis on the relationship between industry concentration and cartel formation, our result shows for both CR3 and HHI as industry concentration increase, the likelihood of cartel formation decreased, although it is not statistically significant. This result differs from that of OFT (2005). The following two interpretations can be inferred from our results: the first one is that, as is often found in classical industrial organization literature, it is implied that industries with a high level of industry concentration also have a high profit rates. Therefore, there is no need to form cartels in industry with high concentration and thus there is no relationship between them. Another interpretation is that given the fact that this analysis uses data only for cartels which are captured by JFTC, in concentrated industries firms successfully form cartels and it is difficult for JFTC to correctly capture them.

With cash earnings per employee, which is a factor related to employee, the results showed a significant positive correlation, which is the same as OFT (2005). Factors concerning employee in relation to cartels were not indicated in the theoretical analysis but OFT makes the following two indications for these results. The first is that in industries with high cash earnings per employee there are thought to be employees with higher wages but these employees are thought to be in roles related to vital information concerning a company's business. As a result, there is a higher possibility of a cartel being discovered or of discovering proof related to a cartel. The second is the possibility that this variable reflects effects of other variables not included in the model. $ ^{6} $ As a separate interpretation differing from that of OFT, similar to the relationship between the value of shipments and the formation of cartels, there is a possibility that the investigations into cartels by competition authorities tend to focus on high profit industries. Conversely, the opposite view is also possible. That is, because of cartels, company can make high profits and thus, as a result, employees can obtain high cash earnings.

Regarding the machinery/equipment acquisition value per employee, the results indicated a significantly negative relationship. It is difficult to interpret how this variable impacts cartel formation, but we do offer an interpretation based on viewing machinery/equipment acquisition value per employee as a capital labor ratio per employee. Labor productivity is expected to increase as the capital labor ratio increases. The increase in labor productivity is a factor that potentially increases overall corporate profitability and, as a result, high in capital labor ratio could decrease the likelihood of cartel formation.

Regarding other variables, results showed that the relationship between cash earnings per establishment and cartel formation is negative and that CUR and cartel formation is positive. An interpretation of these correlations will be left for future discussions.

Lastly, referring to the pseudo $ R^{2} $ , the logit model of the present paper explains approximately 22% to 26% of the factors related to cartel formation.