<p>Mergers and Investments: Where Do <span>We Stand?</span></p>

Lefouili, Yassine; Madio, Leonardo

doi:10.2139/ssrn.4757182

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Mergers and Investments: Where Do We Stand?

38 Pages Posted: 11 Apr 2024 Last revised: 14 Jan 2025

See all articles by Yassine Lefouili

Yassine Lefouili

University of Toulouse 1 - Toulouse School of Economics (TSE)

Leonardo Madio

University of Padua - Department of Economics and Management; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 14, 2025

Abstract

In this paper, we review recent studies on the impact of mergers on investments. First, we examine how mergers among competing incumbents influence firms’ incentives to develop new products and undertake cost-reducing or quality-enhancing investments. Second, we analyze how an incumbent’s acquisition of an innovative entrant affects the investment incentives of both parties. Third, we discuss the effects of vertical mergers on the investment decisions of both upstream and downstream firms. Finally, we outline a few directions for future research.

Keywords: Competition, Investments, Innovation, Mergers, Entry

JEL Classification: D43, L13, L40

Suggested Citation: Suggested Citation

Lefouili, Yassine and Madio, Leonardo,

Mergers and Investments: Where Do We Stand?

(January 14, 2025). Available at SSRN: https://ssrn.com/abstract=4757182 or http://dx.doi.org/10.2139/ssrn.4757182