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

Grajek, M. and Gugler, Klaus and Kretschmer, T. and Miscisin, I. (2019) Static or Dynamic Efficiency: Horizontal Merger Effects in the Wireless Telecommunications Industry. Review of Industrial Organization, 55 (3). pp. 375-402. ISSN 1573-7160

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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.

Item Type: Article
Keywords: Telecom Mergers, Static and dynamic Efficiency, Difference-in-difference
Classification Codes: JEL L22, O33, G34, L96
Version of the Document: Published
Depositing User: ePub Administrator
Date Deposited: 26 Aug 2019 12:17
Last Modified: 25 Oct 2019 10:26
Related URLs:
URI: https://epub.wu.ac.at/id/eprint/7112

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