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M&As, Innovation and Market Power

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HIGHLIGHTS ‣ Technological mergers and acquisitions (M&As) increase investors' market power by around 2% beyond standard M&As, with stronger effects concentrated among top R&D investors, US-based investors, and high-tech manufacturing investors. ‣ The increase in market power seems primarily driven by the consolidation of control over existing patents, limiting knowledge diffusion and making it harder for competitors to catch up. ‣ These findings support ongoing policy discussions on updating merger review regulations, as traditional concentration metrics may not fully capture competition risks posed by large technology firms. ‣ Technological assets and innovations are often embedded and masked within larger M&A deals. Separating the technology component of patents would allow regulators to assess competition concerns related to innovation while still allowing the acquisition to proceed. ‣ The analysis draws on a newly constructed firm-level dataset to provide a more systematic picture of technological M&As and market power.

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  • Martinez Cillero Maria & Napolitano Lorenzo & Rentocchini Francesco & Seri Cecilia & Zaurino Elena, 2026. "M&As, Innovation and Market Power," JRC Research Reports JRC145729, Joint Research Centre.
    • Handle: RePEc:ipt:iptwpa:jrc145729
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