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Merger externalities in oligopolistic markets

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  • Gugler, Klaus
  • Szücs, Florian

Abstract

We evaluate the external effects of 183 large mergers at the market level by assessing the impact on the main competitors of the merging firms. Using synthetic control groups and difference in difference estimation, we find that the return on assets of rival firms increases significantly after a merger. The size of the effect varies strongly with market characteristics and the intensity of competition.

Suggested Citation

  • Gugler, Klaus & Szücs, Florian, 2016. "Merger externalities in oligopolistic markets," International Journal of Industrial Organization, Elsevier, vol. 47(C), pages 230-254.
  • Handle: RePEc:eee:indorg:v:47:y:2016:i:c:p:230-254
    DOI: 10.1016/j.ijindorg.2016.05.003
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    Citations

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    Cited by:

    1. Ralph Siebert, 2017. "Heterogeneous Merger Impacts on Competitive Outcomes," CESifo Working Paper Series 6607, CESifo Group Munich.
    2. Johannes Boehm & Jan Sonntag, 2018. "Vertical Integration and Foreclosure: Evidence from Production Network Data," Sciences Po publications 2018-12, Sciences Po.
    3. repec:eee:corfin:v:45:y:2017:i:c:p:467-479 is not listed on IDEAS
    4. repec:eee:indorg:v:63:y:2019:i:c:p:283-325 is not listed on IDEAS
    5. repec:bla:manchs:v:87:y:2019:i:5:p:678-693 is not listed on IDEAS
    6. Tsuyoshi Toshimitsu, 2017. "Merger Paradox in a Network Product Market: A Horizontally Differentiated Three-Firm Model," Discussion Paper Series 167, School of Economics, Kwansei Gakuin University, revised Sep 2017.
    7. Haucap, Justus & Rasch, Alexander & Stiebale, Joel, 2019. "How mergers affect innovation: Theory and evidence," International Journal of Industrial Organization, Elsevier, vol. 63(C), pages 283-325.
    8. Tsuyoshi Toshimitsu, 2019. "Analysis of Merger Control in a Network Products Market," Manchester School, University of Manchester, vol. 87(5), pages 678-693, September.

    More about this item

    Keywords

    Mergers; Spillovers; Rivals; Synthetic controls;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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