Mergers and Innovation: Evidence from the Hard Disk Drive Market

Anna Rita Bennato, Stephen Davies, Franco Mariuzzo and Peter Ormosi
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Anna Rita Bennato: Loughborough University
Stephen Davies: Centre for Competition Policy and School of Economics, University of East Anglia
Franco Mariuzzo: Centre for Competition Policy and School of Economics, University of East Anglia
Peter Ormosi: Centre for Competition Policy and Norwich Business School, University of East Anglia

No 2018-04v3, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: This case study is a relatively rare ex-post evaluation of how the level of innovation changed after the 5-to-3 consolidation of the world-wide hard disk drive (HDD) industry. We take a holistic view of innovation, employing four different measures: R&D expenditure and patent activity as indicators of innovative inputs, and the number of new products marketed, and their unit user costs as indicators of innovative output. This allows us to distinguish the magnitude of the merging parties' innovative efforts from the productivity of those efforts. Of the remaining HDD manufacturers, for Seagate we found an increase in all our innovation measures following the mergers, but for Western Digital the evidence is mixed. Methodologically, the paper draws light on some of the challenges of conducting similar case-specific retrospective studies on the impact of mergers on innovation.

Keywords: ex-post evaluation; innovation; mergers; patents; R&D (search for similar items in EconPapers)
JEL-codes: L10 L40 O30 (search for similar items in EconPapers)
Date: 2019-03-14
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