Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/220042 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2020-005/VII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
There is a growing concern that U.S. merger control may have been too lenient, but empirical evidence remains limited. After reviewing event studies as a method to acquire empirical insights into the competitive effects of mergers, I propose a novel application using Hoberg-Phillips TNIC data. This application allows for the ready approximation of abnormal stock market returns of likely competitors to 1,751 of the largest U.S. mergers since 1997. I document that likely competitors experience on average an abnormal return of close to one percent around a merger announcement. Abnormal returns are also strongly associated with concerns of market power, which suggests that competitors benefit at least in part because of an anticipation of anti-competitive effects -- and hence insufficient merger control.
Subjects: 
Mergers
Antitrust
Event Studies
Text-Based Network Industry Classification
JEL: 
G14
G34
L13
L40
Document Type: 
Working Paper

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