Horizontal Mergers in the Paper Industry.
I examine mergers and acquisitions in the U.S. paper and paperboard industry, which experienced a wave of horizontal mergers during the mid-1980s. I describe how the mergers affected investment decisions, costs, and consumers, finding that merged firms lose market share and are more likely to scrap capacity subsequent to an acquisition. I estimate a cost function for individual firms based on an investment model, finding that the efficiency of the majority of acquiring firms increases following an acquisition. Using the estimated cost function, I quantify welfare effects and find evidence of total welfare increases in some paper product categories as a result of the mergers. Copyright 2003 by the RAND Corporation.
Year of publication: |
2003
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Authors: | Pesendorfer, Martin |
Published in: |
RAND Journal of Economics. - The RAND Corporation, ISSN 0741-6261. - Vol. 34.2003, 3, p. 495-515
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Publisher: |
The RAND Corporation |
Saved in:
Saved in favorites
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