Essays in Mergers and Acquisitions, Innovation and Product Markets

Download or read book Essays in Mergers and Acquisitions, Innovation and Product Markets written by Mosab Hammoudeh and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Chapter 2 titled "Seeking efficiency or price gouging? Evidence from pharmaceutical mergers," we show that pharmaceutical mergers are a response to ex-ante competitive pressure, and in turn, reduce product market competition. Although egregious drug price increases are not widespread, merger-induced reduction in competition does help prop up prices. We also find robust support for the efficiency perspective of mergers. Firms with a high product overlap are more likely to merge and mergers are followed by a decline in the price of drugs that are similar across the acquirer and target portfolios. This decline is likely due to efficiency gains in the R&D process and reduction in operating expenses.