Building new plants or entering by acquisition? Firm heterogeneity and entry barriers in the US cement industry

• 成果类型: Article
• 署名作者: Perez-Saiz, Hector
• 署名单位: Bank of Canada
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12100
• 发表日期: 2015
• 页码: 625-649
• 关键词: MARKET-STRUCTURE; MODEL; PRODUCTIVITY; mergers; integration; equilibria; takeovers; CHOICE

摘要

I estimate a model of entry for the cement industry that considers two options of expansion: building a plant or acquiring an incumbent. The model takes into account that there is a transfer of the buyer firm-level characteristics to the acquired plants, which affects profits from the acquisition. Estimates show that a less-permissive Reagan-Bush administration's merger policy would decrease the number of acquired plants by 71%, greenfield entry would increase by 9.2% and consumer surplus would decrease by 23.5%. Results suggest that regulators should be concerned about policies that negatively affect the efficient reallocation of assets between incumbents and entrants.