Mergers and Acquisitions under Common Ownership
AEA Papers & Proceedings, Vol. 113, May 2023.
8 Pages Posted: 13 Jan 2023 Last revised: 14 Apr 2023
Date Written: January 11, 2023
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 that mergers are increasingly concentrated among firm pairs with a high degree of product market interaction and a moderate-to-high degree of common ownership. We estimate how much mergers have raised aggregate corporate profits and reduced consumer surplus and quantify how the anti-competitive effects of mergers are affected by common ownership and shareholder value maximization motives.
Keywords: common ownership, concentration, competition, mergers, antitrust, networks
JEL Classification: D43, D85, E23, L16, G23, G34
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