Event Studies in Merger Analysis: Review and an Application Using U.S. TNIC Data

30 Pages Posted: 10 Jan 2020 Last revised: 1 Apr 2020

See all articles by Timo Klein

Timo Klein

Utrecht University School of Economics; Oxera Consulting LLP

Date Written: January 10, 2020


There is a growing concern that U.S. merger control may have been too lenient, but empirical evidence remains limited. After reviewing event studies as a method to acquire empirical insights into the competitive effects of mergers, I propose a novel application using Hoberg-Phillips TNIC data. This application allows for the ready approximation of abnormal stock market returns of likely competitors to 1,751 of the largest U.S. mergers since 1997. I document that likely competitors experience on average an abnormal return of close to one percent around a merger announcement. Abnormal returns are also strongly associated with concerns of market power, which suggests that competitors benefit at least in part because of an anticipation of anti-competitive effects -- and hence insufficient merger control.

Keywords: Mergers, Antitrust, Event Studies, Text-Based Network Industry Classification

JEL Classification: G14, G34, L13, L40

Suggested Citation

Klein, Timo and Klein, Timo, Event Studies in Merger Analysis: Review and an Application Using U.S. TNIC Data (January 10, 2020). Amsterdam Law School Research Paper No. 2020-02, Amsterdam Center for Law & Economics Working Paper No. 2020-01, Available at SSRN: https://ssrn.com/abstract=3517189 or http://dx.doi.org/10.2139/ssrn.3517189

Timo Klein (Contact Author)

Oxera Consulting LLP ( email )

Alfred Street
Oxford OX1 4EH
United States

Utrecht University School of Economics ( email )

Vredenburg 138
Utrecht, 3511 BG

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