Abstract

http://ssrn.com/abstract=1499723
 
 

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Static and Dynamic Merger Effects: A Market Share Based Empirical Analysis


Mikko Packalen


University of Waterloo - Department of Economics

Anindya Sen


University of Waterloo - Department of Economics

November 3, 2009


Abstract:     
Merger-specific efficiencies continue to play a relatively small role in merger enforcement and merger retrospectives. Motivated by the paucity of empirical analyses of merger-specific efficiencies, we examine a merger's market share effects. Standard merger theory predicts that if merger-specific efficiencies are present, the merged firm should regain market share in the long-run. We estimate short and long-run merger effects on market shares from the divestiture of Texaco's Canadian assets. We use a difference-in-difference specification that compares changes for the merging firm with changes for other vertically integrated firms in the same market. Our approach is a useful complement to across market comparisons, which are often hindered by the difficulty of finding control markets that experience the same supply and demand shocks as the treatment markets.

Number of Pages in PDF File: 33

Keywords: merger, concentration, market share, gasoline

JEL Classification: L41, L71, L2, L1

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Date posted: November 4, 2009 ; Last revised: August 5, 2011

Suggested Citation

Packalen, Mikko and Sen, Anindya, Static and Dynamic Merger Effects: A Market Share Based Empirical Analysis (November 3, 2009). Available at SSRN: http://ssrn.com/abstract=1499723 or http://dx.doi.org/10.2139/ssrn.1499723

Contact Information

Mikko Packalen (Contact Author)
University of Waterloo - Department of Economics ( email )
Waterloo, Ontario N2L 3G1
Canada
Anindya Sen
University of Waterloo - Department of Economics ( email )
200 University Avenue W.
Waterloo, Ontario N2L 3G1
Canada
519.885.1211, ext. 2123 (Phone)
519.725.0530 (Fax)
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