Horizontal Mergers in the Paper Industry
This paper examines mergers and acquisitions in the US paper and paperboard industry. This industry experienced a wave of horizontal mergers during the mid 1980s. We study implications of mergers on consumers, rival firms, and welfare. The analysis is based on a model of investment decisions. We compare the equilibrium investment decisions prior to and after the merger wave. The evidence indicates that the efficiency of the majority of acquiring firms increases following an acquisition. Based on the parameter estimates, we calculate merger welfare effects. We find that total welfare increased by $583.5 million as a result of the mergers.
|Date of creation:||Oct 1998|
|Date of revision:|
|Publication status:||published as Pesendorfer, Martin. "Horizontal Mergers In The Paper Industry," Rand Journal of Economics, 2003, v34(3,Autumn), 495-515.|
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