Acquisitions, markups, efficiency, and product quality: Evidence from India

Joel Stiebale and Dev Vencappa

No 229, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This paper uses a rich panel data set of Indian manufacturing firms to analyze the effects of domestic and international acquisitions on various outcomes at target firm and product level. We apply recent methodological advances in the estimation of production functions together with information on prices and quantities to estimate physical productivity, markups, marginal costs and proxies for product quality. Using a propensity score reweighting estimator, we find that acquisitions are associated with increases in quantities and markups and lower marginal costs on average. These changes are most pronounced if acquirers are located in technologically advanced countries. We also provide evidence that the quality of products increases while quality-adjusted prices fall upon acquisitions.

Keywords: Foreign Direct Investment; Foreign Ownership; Mergers and Acquisitions; Multi-Product Firms; Productivity (search for similar items in EconPapers)
JEL-codes: D22 D24 F23 F61 G34 L25 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com, nep-eff and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://www.econstor.eu/bitstream/10419/147006/1/870644866.pdf (application/pdf)

Related works:
Journal Article: Acquisitions, markups, efficiency, and product quality: Evidence from India (2018)
Working Paper: Acquisitions, Markups, Efficiency, and Product Quality: Evidence from India (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:229

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