Mergers and Investments: Where Do We Stand?

Yassine Lefouili and Leonardo Madio
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Yassine Lefouili: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Leonardo Madio: Unipd - Università degli Studi di Padova = University of Padua

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Abstract: In this paper, we review recent studies on the impact of mergers on investments. First, we examine how mergers among competing incumbents influence firms' incentives to develop new products and undertake cost-reducing or quality-enhancing investments. Second, we analyze how an incumbent's acquisition of an innovative entrant affects the investment incentives of both parties. Third, we discuss the effects of vertical mergers on the investment decisions of both upstream and downstream firms. Finally, we outline a few directions for future research.

Keywords: Competition; Investments; Innovation; Mergers; Entry (search for similar items in EconPapers)
Date: 2025-06-25
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