Mergers and market power: evidence from rivals' responses in European markets

Florian Szücs, Joel Stiebale

Publication: Scientific journalJournal articlepeer-review


We analyze the effects of M&A on the markups of non-merging rival firms across a broad set of industries. We exploit expert market definitions from the European Commission's merger decisions to identify relevant competitors in narrowly defined product markets and estimate markups as a measure of market power. Our results indicate that rivals increase their markups after mergers. Consistent with increases in market power, the effects are particularly pronounced when pre-merger concentration is high, when competitors are few, and when relevant markets are national. Merger rivals also reduce their employment, sales, and investment, whereas their profits increase.
Original languageEnglish
Pages (from-to)678-702
JournalRAND Journal of Economics
Issue number4
Early online date2022
Publication statusPublished - 2022

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