Product Repositioning by Merging Firms

Enghin Atalay, Alan T. Sorensen, Christopher J. Sullivan and Wanjia Zhu

No 31229, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine merging firms' additions and removals of products for a sample of 66 mergers across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by merging firms. Merging firms tend to both drop and add products at the periphery of their joint product portfolios, with the net effect of increasing within-firm product similarity. These results are consistent with theories of the firm that emphasize cost synergies among similar types of products or managerial core competencies linked to particular segments of the product market.

JEL-codes: L0 L1 L10 L13 L21 L22 L23 L25 L4 L40 (search for similar items in EconPapers)
Date: 2023-05
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-reg
Note: IO
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Published as Enghin Atalay & Alan Sorensen & Christopher Sullivan & Wanjia Zhu, 2024. "Product Repositioning by Merging Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 72(2), pages 868-908, June.
Published as Enghin Atalay & Alan Sorensen & Christopher Sullivan & Wanjia Zhu, 2024. "Product Repositioning by Merging Firms*," The Journal of Industrial Economics, vol 72(2), pages 868-908.

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