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  5. New Evidence on M&A and Antitrust Policy
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New Evidence on M&A and Antitrust Policy

Paper Session

Friday, Jan. 6, 2023 10:15 AM - 12:15 PM (CST)

Hilton Riverside, Grand Salon D Sec 21 & 24
Hosted By: American Economic Association
  • Chair: Ginger Zhe Jin, University of Maryland and NBER

Rising Markups: What Do the Data Say?

Christopher T. Conlon
,
New York University
Nathan Miller
,
Georgetown University

Abstract

Recent evidence suggests markups have been increasing for many firms in the United States. These findings have been illustrated using both the cost-minimization approach (accounting data), and the demand-based approach (declining price elasticities). The period from 2000-2020 also saw stable to declining prices for many key product categories. The literature offers a variety of explanations for changes in markups over time: increased product quality, variety, and differentiation; technological change that substitutes fixed costs for marginal costs; and lax antitrust enforcement. We evaluate the empirical evidence, discuss the implications for policy, and propose directions for future research.

Strategic announcements of nonreportable mergers

Thomas G. Wollmann
,
University of Chicago

Abstract

Antitrust attorneys commonly caution clients that information contained in press releases can increase scrutiny of ``competitively sensitive'' mergers that might otherwise escape detection. Thus, merging parties may strategically avoid publicizing the terms of the deal (e.g., the value of the transaction), especially in cases where they are not required to directly inform the authorities of the merger. Yet, analysis of economy-wide merger activity typically omits mergers with unpublicized values. Using novel data and recently proposed methods, I argue that this omission leads researchers to mischaracterize merger activity and severely mismeasure the extent of stealth consolidation.

Startup Buyout and Patentable Innovation: New Evidence from PatentsView

Zhaoqi Cheng
,
Boston University
Ginger Zhe Jin
,
University of Maryland and NBER
Mario Leccese
,
University of Maryland
Dokyun Lee
,
Boston University
Liad Wagman
,
Illinois Institute of Technology

Abstract

Many entrepreneurs found technology startups to develop original ideas, with an eye toward IPO or buyout as a successful exit. However, policymakers are increasingly concerned that incumbent acquisitions of startups may slow down rather than speed up or expand the innovations of the acquired companies. To address this concern, we merge S&P-compiled data on technology acquisitions between 2007 and 2021 with PatentsView data since 1976 from the US Patent and Trademark Office. We then compare the patent profiles of acquirers and targets, and document changes in acquirers' profiles in terms of patent volume, direction, and significance after startup acquisition. 

Mergers & Acquisitions under Common Ownership

Miguel Antón
,
IESE
Florian Ederer
,
Yale University
Bruno Pellegrino
,
University of Maryland
Mireia Giné
,
IESE

Abstract

We provide new facts about the cross-section and evolution of mergers and acquisitions for U.S. public firms. Using a general equilibrium model with a hedonic demand system and data on institutional ownership, we document the degree of product market competition and common ownership among merging and non-merging firms. We then quantify how the effects of mergers on profits, consumer surplus, and total surplus are affected by common ownership and shareholder value maximization motives.

Discussant(s)
John Asker
,
University of California-Los Angeles
Nancy Rose
,
Massachusetts Institute of Technology
Hyo Kang
,
University of Southern California
Jan de Loecker
,
KU Leuven
JEL Classifications
  • D4 - Market Structure, Pricing, and Design
  • G3 - Corporate Finance and Governance