Mergers Stifle Innovation, Harm Consumers in High-Tech Industries
The article explores how mergers impact innovation in industries with high research and development activities. The researchers used a model to predict that mergers are more profitable in innovation-focused industries. They studied mergers in the pharmaceutical sector in Europe and found that after a merger, both the merged company and its competitors experienced a significant decrease in patenting and research and development efforts. This suggests that mergers can lead to reduced innovation in the industry.