Economics, Econometrics and Finance
8 years ago

Mergers may harm economy, caution urged against efficiency gains defense.

The Impact of Mergers on Economic Performance and the Role of Competition Policy
Hiroyuki Odagiri

Paper Summary

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Mergers can impact the economy by increasing profits and potentially lowering prices for consumers if efficiency gains are significant. However, real-world evidence suggests that mergers may not always lead to efficiency improvements. Managers aiming for growth should focus on investing in research and development internally rather than relying on mergers and acquisitions. It is important to be cautious when using efficiency gains as a justification for horizontal mergers.