Mergers and rivals' mark-ups: Evidence from European paper manufacturers

Arbeitspapier

This paper investigates the effect of merger-driven market concentration on the markups of non-merging rival firms in Europe's paper manufacturing industry. Using a representative data set of 400 independently-owned companies spanning a ten-year period, we aim to disentangle the impact of full-scale mergers and acquisitions from that due to other concentration-increasing developments. We find a positive and statistically significant relationship between price-cost margins and overall industry consolidation, as captured by the Herfindahl-Hirschman and four-firm indexes. However, takeover-related market share amalgamation has a negative impact, albeit of more modest proportions. The latter result seems to be driven by vertical transactions, suggesting that input-side channels, much as product price competition, may explain non-merging firms' mark-up response.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: HEI Working Paper ; No. 21/2007

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Antitrust Law ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Subject: Mergers and acquisitions ; Concentration ; Mark-up ; Competition policy ; Übernahme ; Marktmacht ; Mark-up Pricing ; Konzentrationsindex ; Wettbewerbspolitik ; Papierindustrie ; Europa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Marinov, Rosen
• Event: Veröffentlichung
• (who): Graduate Institute of International Studies
• (where): Geneva
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/77388
• Last update: 10.03.2025, 11:46 AM CET