Economics at your fingertips  

Cost functions and determinants of unit cost effects in horizontal airline M&As

Sveinn Vidar Gudmundsson, Rico Merkert and Renato Redondi

Transportation Research Part A: Policy and Practice, 2017, vol. 103, issue C, 444-454

Abstract: This paper analyses the unit cost effects of mergers and acquisitions (M&As) using linear, quadratic, and translog cost functions. In addition to a basic unit cost model we specify separate models for distress, profit, relative size, and cost difference, among the merging firms. We use a sample of 19 horizontal M&As in the international airline industry and data spanning from 1980 to 2012. Our models show that M&As do not affect unit costs in a significant way, unless the relative size difference of the merging firms is large, in which case we detect an increase in unit costs.

Keywords: Cost analysis; Efficiencies; Airlines; Mergers and acquisition; Unit costs; Cost functions (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
https://shop.elsevie ... _01_ooc_1&version=01

Access Statistics for this article

Transportation Research Part A: Policy and Practice is currently edited by John (J.M.) Rose

More articles in Transportation Research Part A: Policy and Practice from Elsevier
Series data maintained by Dana Niculescu ().

Page updated 2017-10-07
Handle: RePEc:eee:transa:v:103:y:2017:i:c:p:444-454