Merger Policy with Merger Choice

Merger Policy , Entry , and Entrepreneurship

We assess the impact of merger policy on entry and entrepreneurship. Facing uncertainty about its prospects and foreseeing that it may wish to quit should profitability prove poor, a rational entrant considers possible exit routes. Horizontal merger reduces competition subsequently, lowering welfare in the short run, but also provides a valuable exit route. By facilitating exit and thus raising...

Merger Failure and Merger Profitability *

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Merger Integration and Merger Success

We examine the importance of merger integration risk to the outcomes of mergers using new product-based ex ante measures of integration risk at the firm and firm-pair level. Our ex ante measures are significantly associated with ex post statements by managers in their 10-K indicating difficulties with merger integration and also employee retention issues. We find that firms performing acquisiti...

What should regulators do about merger policy?

I argue that merger policy needs to be driven by di€erent considerations in Europe, Japan and the United States. In Europe the main challenge is to set up a system so that ecient consolidation can occur once the single currency is established. In Japan the policy ought to be directed towards trying to attract foreign institutions to acquire under-capitalized domestic institutions. Japan does n...

Making European Merger Policy More Predictable