Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/48604
Authors: 
Clougherty, Joseph A.
Duso, Tomaso
Year of Publication: 
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

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