Evidence for the Effects of Mergers on Market Power and Efficiency /
Blonigen, Bruce A.
Evidence for the Effects of Mergers on Market Power and Efficiency / Bruce A. Blonigen, Justin R. Pierce. - Cambridge, Mass. National Bureau of Economic Research 2016. - 1 online resource: illustrations (black and white); - NBER working paper series no. w22750 . - Working Paper Series (National Bureau of Economic Research) no. w22750. .
October 2016.
Study of the impact of mergers and acquisitions (M&As) on productivity and market power has been complicated by the difficulty of separating these two effects. We use newly-developed techniques to separately estimate productivity and markups across a wide range of industries using detailed plant-level data. Employing a difference-in-differences framework, we find that M&As are associated with increases in average markups, but find little evidence for effects on plant-level productivity. We also examine whether M&As increase efficiency through reallocation of production to more efficient plants or through reductions in administrative operations, but again find little evidence for these channels, on average. The results are robust to a range of approaches to address the endogeneity of firms' merger decisions.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Evidence for the Effects of Mergers on Market Power and Efficiency / Bruce A. Blonigen, Justin R. Pierce. - Cambridge, Mass. National Bureau of Economic Research 2016. - 1 online resource: illustrations (black and white); - NBER working paper series no. w22750 . - Working Paper Series (National Bureau of Economic Research) no. w22750. .
October 2016.
Study of the impact of mergers and acquisitions (M&As) on productivity and market power has been complicated by the difficulty of separating these two effects. We use newly-developed techniques to separately estimate productivity and markups across a wide range of industries using detailed plant-level data. Employing a difference-in-differences framework, we find that M&As are associated with increases in average markups, but find little evidence for effects on plant-level productivity. We also examine whether M&As increase efficiency through reallocation of production to more efficient plants or through reductions in administrative operations, but again find little evidence for these channels, on average. The results are robust to a range of approaches to address the endogeneity of firms' merger decisions.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.