Evidence on Mergers and Acquisitions

This paper provides a broad brush treatment of the empirical economics literature regarding the effects of mergers and acquisitions. Much of the literature has direct or indirect implications for competition policy. Of most direct interest to those concerned with merger-related antitrust issues are three types of empirical studies: stock market event studies, large-scale accounting data studies, and case studies that use either interview methods or more objective, data-intensive, pre-merger and post-merger performance approaches to study individual mergers. In recent years, researchers have begun to merge the stock market study approach and the accounting/finance approach in the hopes of providing a more robust analysis. Sections III through VI discuss briefly the strengths and weaknesses of each type of study as well as discussing specific studies in each category.