The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Merger Analysis (United States)

  • Dennis W. Carlton
  • Jeffrey M. Perloff
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2242

Abstract

There are three different types of mergers: horizontal, vertical, and conglomerate. We discuss all three and explain why mergers can be a desirable way to expand a firm. Then we turn to the evidence on the amount of merger activity. Finally, we address one of the important questions surrounding mergers: whether they are motivated by the desire to improve efficiency or by the desire to acquire market power. Although the evidence is sometimes ambiguous, the overwhelming consensus is that most merger activity in the United States is motivated by efficiency considerations.

Keywords

Antitrust enforcement Conglomerate mergers Economies of scale Economies of scope Efficiency Horizontal mergers Litigation Market power Mergers Reputation Takeovers Taxation of corporate profits Transaction costs Vertical mergers 

JEL Classifications

L40 
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Notes

Bibliography

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Dennis W. Carlton
    • 1
  • Jeffrey M. Perloff
    • 1
  1. 1.