Anticompetitive effects of horizontal acquisitions: The impact of within-industry product similarity

• 成果类型: Article
• 署名作者: Fathollahi, Maryam; Harford, Jarrad; Klasa, Sandy
• 署名单位: University of Oklahoma System; University of Oklahoma - Norman; University of Washington; University of Washington Seattle; University of Arizona; Fudan University; European Corporate Governance Institute
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.017
• 发表日期: 2022
• 页码: 645-669
• 关键词: Horizontal acquisitions; Product similarity; Product market competition; Industry concentration

摘要

Theory predicts that horizontal acquisitions can effectively increase incumbent firms' market power in concentrated industries with high product similarity. Using a novel measure for industry product similarity, we show that in such industries firms' propensity to make horizontal acquisitions is greater and that the acquisitions result in more positive announcement returns for the acquirer and rival firms and in a larger premium paid for the target. Also, the deals harm dependent customer and supplier firms and they are more likely to be challenged by antitrust authorities. Overall, by emphasizing the importance of product similarity, our results help explain mixed empirical findings on whether horizontal acquisitions are used to reduce competition intensity. (c) 2021 Elsevier B.V. All rights reserved.