Static or Dynamic Efficiency: Horizontal Merger Effects in the Wireless Telecommunications Industry

Michal Grajek, Klaus Gugler, Tobias Kretschmer, Ion Mişcişin

Publication: Scientific journalJournal articleResearchpeer-review

Abstract

This paper studies five mergers in the European wireless telecommunication industry and analyzes their impact on prices and capital expenditures of both merging carriers and their rivals. We find substantial heterogeneity in the relationship between increases in concentration and carriers’ prices. The specifics of each merger case clearly matter. Moreover, we find a positive correlation between the price and the investment effect; when the prices after a merger increase (decrease), the investments increase (decrease) too. Thus, we document a trade-off between static and dynamic efficiency of mergers.
Original languageEnglish
Pages (from-to)375 - 402
JournalReview of Industrial Organization
Volume55
Issue number3
DOIs
Publication statusPublished - 2019

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502013 Industrial economics

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