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http://hdl.handle.net/10419/48604
  
Title:Using rival effects to identify synergies and improve merger typologies PDF Logo
Authors:Clougherty, Joseph A.
Duso, Tomaso
Issue Date:2011
Series/Report no.:DICE discussion paper 25
Abstract:The strategy literature has found it difficult to differentiate between collusive and efficiencybased synergies in horizontal merger activity. We propose a theoretically-backed methodological approach to classify mergers that yields more information on merger types and merger effects, and that can, moreover, distinguish between mergers characterized largely by collusion-based synergies and mergers characterized largely by efficiency-based synergies. Crucial to the proposed measurement approach is that it encompasses the impact of merger events not only on merging firms (custom in the literature), but also on non-merging rival firms (novel in the literature). Employing the event-study procedure with stock-market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-American sub-sample) and from the European continent, we demonstrate how the proposed schematic can better clarify the nature of merger activity.
Subjects:acquisitions
event-study
mergers
research methods
rivals
synergy
Document Type:Working Paper
Appears in Collections:DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)

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