2006–2010

Industry Concentration and Welfare: On the Use of Stock Market Evidence from Horizontal Mergers

Reprint No. 2010:23

Author(s): Sven-Olof Fridolfsson and Johan StennekYear: 2010 Title: Economica Volume (No.): 77 (308) Pages: 734–750
Online article (restrictions may apply)


There is diverging empirical evidence on the competitive effects of horizontal mergers: consumer prices (and thus presumably competitors’ profits) often rise while competitors’ share prices fall. Our model of endogenous mergers provides a possible reconciliation. It is demonstrated that anti-competitive mergers may reduce competitors’ share prices, if the merger announcement informs the market that the competitors lost a race to buy the target. Also the use of ‘first rumour’ as an event may create similar problems of interpretation. We also indicate how the event-study methodology may be adapted to identify competitive effects and thus the welfare consequences for consumers.


Reference:
Fridolfsson, Sven-Olof and Johan Stennek (2010), "Industry Concentration and Welfare: On the Use of Stock Market Evidence from Horizontal Mergers". Economica 77(308), 734–750.

Global index of the sharing economy

Timbro SEI

2018 Bergh Funcke Wernberg - Timbro Sharing Economy Index-1fHemsidan.jpg

Andreas Bergh, IFN and Lund University, is one of the authors of this book. The Timbro Sharing Economy Index is the first global index of the sharing economy. The index has been compiled using traffic volume data and scraped data, and provides a unique insight into the driving factors behind the peer-to-peer economy.

About the book

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