The Ripple Effect: Analyzing Ecosystem-wide Value Spillovers from Digital Giants' M&A

Samuel Keil, Constantin Peter Schick, Martin Sternal and Dirk Schiereck

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This study investigates how M&A announcements by six dominant digital platform companies – termed Digital Giants (Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia) – affect market valuations of competitors across distinct dimensions of rivalry. Applying an event study and multivariate regression to 889 M&A announcements from 2010 to 2024, we identify an asymmetric pattern across two rivalry dimensions. At the submarket level (Direct Rivals), diffuse signaling prevails: they show no systematic reactions, consistent with platform envelopment decoupling exposure from the product-market boundaries classical rival effect theory presupposes. At ecosystem level, ecosystem-wide exposure emerges: Indirect Rivals – Digital Giants competing for orchestration control – co-move with the acquirer’s valuation through overlapping governance and infrastructure interdependencies. A comparison against announcement-free days shows this co-movement is only partly continuous, with an announcement-specific component under the SIC-based rival definition. The findings establish a multi-dimensional rivalry framework extending classical rival effect theory to digital platform contexts.

Date: 2026-10-18
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Published in International Conference on Information Systems Proceedings . 47 (2026-10-18)

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:162912

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