Empirical Analysis of the Assessment of Innovation Effects in U.S. Merger Cases

42 Pages Posted: 19 Sep 2014 Last revised: 14 Jun 2017

See all articles by Benjamin René Kern

Benjamin René Kern

Philipps University Marburg - School of Business Administration and Economics

Ralf Dewenter

University of the Federal Armed Forces Hamburg - Department of Economics

Wolfgang Kerber

University of Marburg - School of Business & Economics

Date Written: November 15, 2015

Abstract

In this empirical study all mergers that have been challenged by the U.S. antitrust agencies FTC and DOJ between 1995 and 2008 were analyzed in regard to the question to what extent and how the agencies assessed the innovation effects of mergers. Theoretical background is the still open question how negative effects of mergers on innovation should be taken into account in merger policy. Although we can show in our study that in one third of all challenged mergers also innovation concerns were raised, the results also point to a still existing large degree of uneasiness and inconsistencies of the agencies in regard to the assessment of innovation effects. A particularly interesting result is that - despite the wide-spread rejection of the "innovation market approach" in the antitrust debate - the agencies used more an innovation-specific assessment approach that includes also innovation in the market definition than the pure traditional product market concept. Additionally, we also found significant differences between the assessment approaches of the FTC and the DOJ.

Keywords: innovation, merger policy, US antitrust, innovation market

JEL Classification: K21, L12, L41, O31

Suggested Citation

Kern, Benjamin René and Dewenter, Ralf and Kerber, Wolfgang, Empirical Analysis of the Assessment of Innovation Effects in U.S. Merger Cases (November 15, 2015). Journal of Industry, Competition and Trade, 16, 3, pp. 373-402. Available at SSRN: https://ssrn.com/abstract=2497460 or http://dx.doi.org/10.2139/ssrn.2497460

Benjamin René Kern

Philipps University Marburg - School of Business Administration and Economics ( email )

Universitätsstrasse 24
Marburg, D-35032
Germany

Ralf Dewenter

University of the Federal Armed Forces Hamburg - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

Wolfgang Kerber (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany
+49 6421 2823921 (Phone)

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