Aktas, Nihat
[UCL]
de Bodt, Eric
[UCL]
Derbaix, Arlène
[UCL]
Since several years, an important stream of mergers and acquisitions has been observed in the automobile sector. This sector remodelling is due to the fact that constructors have to produce vehicles that are better equipped, less expensive (due to economies of scale and synergistic effects) and respecting numerous norms. These mergers lead to a higher concentration of the market. Eckbo (1983), Stillman (1983), and Eckbo and Wier (1985) have treated the problem of the competitors reaction within the framework of the Antitrust Policy in the U.S. But we would like to go a step further and, based on Mulin et al. (1995) who studied the customers? reaction, we are going to assess the effects of horizontal mergers (i.e. between constructors) firstly on the horizontal rivals, and then on the suppliers and customers, taking thus also into account upstream and downstream effects. As the results of the previous empirical studies lead to the rejection of the Market Power Hypothesis (no evidence of value reduction for the competitors of the merging firm, Eckbo (1983)), it seems that there is no reason to limit this kind of operations unless other partners would suffer from these actions. Therefore we plan to study downstream and upstream effects, which would be highlighted by the potential existence of abnormal returns for these actors during the period following the operation.


Bibliographic reference |
Aktas, Nihat ; de Bodt, Eric ; Derbaix, Arlène. Horizontal, downstream and upstream effects of merger & acquisition operations in the car industry. ECON Discussion Papers ; 2003/96 (2003) |
Permanent URL |
http://hdl.handle.net/2078.1/5448 |