Empirical evidence on vertical foreclosure
Recent papers have shown conditions under which vertical, mergers can result in anticompetitive foreclosure of unintegrated rivals. These models imply that a necessary but not sufficient condition for anticompetitive foreclosure is that unintegrated rivals are less profitable after a vertical merger. We test this hypothesis by examining the stock prices of unintegrated rivals at the time of a vertical merger announcement and at the time of a government antitrust complaint. We find no evidence to support the foreclosure hypothesis.
|Date of creation:||1993|
|Publication status:||Published in Economic Inquiry 32, no. 2 (April 1994): 303-17.|
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