M&As, Innovation and Market Power

Maria Martinez Cillero (), Lorenzo Napolitano (), Francesco Rentocchini (), Cecilia Seri and Elena Zaurino ()
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Maria Martinez Cillero: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Lorenzo Napolitano: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Francesco Rentocchini: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Elena Zaurino: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No JRC145729, JRC Research Reports from Joint Research Centre

Abstract: HIGHLIGHTS ‣ Technological mergers and acquisitions (M&As) increase investors' market power by around 2% beyond standard M&As, with stronger effects concentrated among top R&D investors, US-based investors, and high-tech manufacturing investors. ‣ The increase in market power seems primarily driven by the consolidation of control over existing patents, limiting knowledge diffusion and making it harder for competitors to catch up. ‣ These findings support ongoing policy discussions on updating merger review regulations, as traditional concentration metrics may not fully capture competition risks posed by large technology firms. ‣ Technological assets and innovations are often embedded and masked within larger M&A deals. Separating the technology component of patents would allow regulators to assess competition concerns related to innovation while still allowing the acquisition to proceed. ‣ The analysis draws on a newly constructed firm-level dataset to provide a more systematic picture of technological M&As and market power.

Date: 2026-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-ind, nep-knm, nep-reg, nep-sbm and nep-tid
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