The competitive effects of mergers: stock market evidence from the U.S. Steel dissolution suit

Article Abstract:

A study as conducted on the influence of mergers on competitiveness. The Eckbo-Stillman event-study methodology was used to analyze the competitive consequences of the U.S. Steel consolidation. Stock market reactions of downstream firms were investigated to compute the net effect of a merger or antitrust action on product market prices. Results showed that U.S. Steel wielded monopoly power and that its dissolution would have boosted industry output while reducing steel prices. The results also generally suggest that mergers can have severe anticompetitive effects.

Primary Iron & Steel, Iron and Steel Mills and Ferroalloy Manufacturing, Blast Furnace and Basic Steel Products, Mergers, acquisitions and divestments, Steel industry, U.S. Steel Group, Liquidation

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The effects of horizontal mergers on competition: the case of the Northern Securities Company

Article Abstract:

The effects of horizontal mergers on competing firms are analyzed by using the establishment of the Northern Securities Company as a sample case. In line with previous studies, no evidence of anticompetitive effects has been found through the analysis of rival firms' stock price reactions to the merger. Such effect is attributed to the effectiveness of antitrust policy or the diversification of firms that tends to mitigate any initial shock to rival firms' share values caused by the merger.

Economic aspects, Antitrust law

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R&D: competition, risk, and performance

Article Abstract:

An analysis of variables which affect research and development (R&D) is presented. It is shown that expected postinnovation collusion generates r and d, but later collusion considerations may lead to deadweight losses. Bertrand industries traditionally perform relatively better than Cournot industries when a tradeoff balance is reached. However, both industry types dominate perfectly collusive industries.

Analysis, Industrial research, Patents

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