Static and dynamic merger effects: A market share based empirical analysis

Mikko Packalen and Anindya Sen ()

International Review of Law and Economics, 2013, vol. 36, issue C, 12-24

Abstract: Merger-specific efficiencies continue to play a relatively small role in merger enforcement and merger retrospectives. Motivated by the paucity of empirical analyses of merger-specific efficiencies, we examine a merger's market share effects. Standard merger theory predicts that if merger-specific efficiencies are present, the merged firm should regain market share in the long run. We estimate short- and long-run merger effects on market shares from the divestiture of Texaco's Canadian assets. Using a difference-in-difference specification we compare changes for the merging firm against changes for other vertically integrated firms in the same market. A general equilibrium type effect renders our estimates biased but the sign of each effect is consistently estimated. Our approach is a useful complement to across-market comparisons, which are often hindered by the difficulty of finding control markets that experience the same supply and demand shocks as the treatment markets.

Keywords: Merger; Efficiencies; Concentration; Market shares; Gasoline (search for similar items in EconPapers)
JEL-codes: L1 L2 L41 L71 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:36:y:2013:i:c:p:12-24

DOI: 10.1016/j.irle.2013.04.003

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