American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition
American Economic Journal: Microeconomics
vol. 17,
no. 1, February 2025
(pp. 389–432)
Abstract
Large beer and spirits makers expanded abroad mainly by acquiring local brands. Exploiting market share data in 76 countries and changes in brand ownership from 2007 to 2018, we estimate that owners matter little for brand performance, except via a negative consumer response to foreign ownership. Counterfactuals indicate that market power increases were large enough to yield higher profits for most mergers without relying on fixed-cost savings. Emulating procompetition policies used by the United States and European Union could have saved South American consumers up to 18 percent. US beer prices would be 3–4 percent higher without DOJ-enforced divestitures.Citation
Alviarez, Vanessa, Keith Head, and Thierry Mayer. 2025. "Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition." American Economic Journal: Microeconomics, 17 (1): 389–432. DOI: 10.1257/mic.20210244Additional Materials
JEL Classification
- F23 Multinational Firms; International Business
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets
- L25 Firm Performance: Size, Diversification, and Scope
- L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
There are no comments for this article.
Login to Comment