Can industry consolidation lead to greater efficiencies

Gholz, Eugene, and Sapolsky, Harvey M. Hall, B. University of Chicago Press. Healy, P. National Bureau of Economic Research. Hough, Paul G. RAND Publishing. Jane's Defence Industry. Jane's Defence Weekly. Jensen, M. Klein, Joel I. Kovacic, William E.

Korb, Lawrence J. Los Angeles Times. Markusen, Ann. McNicol, D. Institute for Defense Analyses. Meeks, Geoffrey. Cambridge University Press. Mueller, Denis, ed. The Determinants and Effects of Mergers. Office of Management and Budget, Rogers, Marc. Roll, Richard. Stillman, Robert S. Tyson, K. Wall Street Journal. Washington Post. Download references. The author appreciated the financial support of the U. You can also search for this author in PubMed Google Scholar.

The views in this article represent only those of the author and not any institution with which the author is affiliated. She provides economic guidance on growth projections, the federal budget, interest rates, unemployment, exchange rates, inflation, and the financial health of defense contractors, as well as trends in the broader economy and in the defense sector.

In the private sector, Dr. Hensel has written over 30 articles and research reports. Reprints and Permissions. Hensel, N. Evidence from the U. Defense Industry. Bus Econ 45, — Download citation.

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Search SpringerLink Search. Abstract The question of whether mergers in various industries lead to greater market power or improved efficiencies has been the subject of numerous public policy debates.

Notes 1. References Arena, Mark V. Article Google Scholar Eckbo, B. Article Google Scholar Hall, B. Google Scholar Healy, P. Google Scholar Jane's Defence Industry. Google Scholar Mueller, Denis, ed. Google Scholar Office of Management and Budget, Google Scholar Stillman, Robert S. Article Google Scholar Tyson, K. Consistent with this, we find that increases in price markups are higher in horizontal mergers.

By contrast, when we look at nonhorizontal mergers, we find little evidence of price markups and even find some positive effects on plant-level productivity. As always, further study is needed. But our research raises doubts about the ability of mergers to drive productivity, particularly when two firms in the same industry merge.

In such cases, companies may well profit, but not necessarily in ways that improve the economy overall. You have 1 free article s left this month. You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Mergers and acquisitions.

New research casts doubt. Blonigen and Justin R. Read more on Mergers and acquisitions or related topic Economics. Bruce A. Blonigen is the Philip H.