Mergers in Declining Industry

Tirza Angerhofer ()
Additional contact information
Tirza Angerhofer: Duke University

Review of Industrial Organization, 2024, vol. 65, issue 1, No 10, 255-267

Abstract: Abstract Declining industries are characterized by prolonged declines in demand and excess capacity. Mergers of firms in declining industries often lead to rationalization of capacity, which makes production more efficient and makes firms better off. This benefit, however, may not be merger-specific, since capacity could be rationalized via firm exit. But the exit process itself may lead to inefficiencies, such as delays and inefficient ordering of exit (i.e., low-cost capital exits before high cost capital), which could warrant a merger. Increased market power of the combined firm, however, may lead to higher prices for consumers, which would be anticompetitive. This article considers the procompetitive efficiencies and anticompetitive consequences of mergers in declining industries and will discuss how the Agencies may evaluate these mergers.

Keywords: Mergers; Declining industries; Business stealing (search for similar items in EconPapers)
JEL-codes: L22 L25 L40 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11151-024-09966-w Abstract (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:kap:revind:v:65:y:2024:i:1:d:10.1007_s11151-024-09966-w

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2

DOI: 10.1007/s11151-024-09966-w

Access Statistics for this article

Review of Industrial Organization is currently edited by L.J. White

More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().