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Mergers and Innovation: Evidence from the Hard Disk Drive Market

Author

Listed:
  • Anna Rita Bennato

    (Loughborough University)

  • Stephen Davies

    (Centre for Competition Policy and School of Economics, University of East Anglia)

  • Franco Mariuzzo

    (Centre for Competition Policy and School of Economics, University of East Anglia)

  • Peter Ormosi

    (Centre for Competition Policy and Norwich Business School, University of East Anglia)

Abstract

This case study is a relatively rare ex-post evaluation of how the level of innovation changed after the 5-to-3 consolidation of the world-wide hard disk drive (HDD) industry. We take a holistic view of innovation, employing four different measures: R&D expenditure and patent activity as indicators of innovative inputs, and the number of new products marketed, and their unit user costs as indicators of innovative output. This allows us to distinguish the magnitude of the merging parties' innovative efforts from the productivity of those efforts. Of the remaining HDD manufacturers, for Seagate we found an increase in all our innovation measures following the mergers, but for Western Digital the evidence is mixed. Methodologically, the paper draws light on some of the challenges of conducting similar case-specific retrospective studies on the impact of mergers on innovation.

Suggested Citation

  • Anna Rita Bennato & Stephen Davies & Franco Mariuzzo & Peter Ormosi, 2019. "Mergers and Innovation: Evidence from the Hard Disk Drive Market," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2018-04v3, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2018_04v3
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    References listed on IDEAS

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    More about this item

    Keywords

    ex-post evaluation; innovation; mergers; patents; R&D;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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