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

Autoren/Herausgeber: Kretschmer, T.
Grajek, M.
Gugler, K.
Miscisin; I.
Erschienen: 2019
Publikationsart: Articles in Refereed Journals (International)
erschienen in: Review of Industrial Organization, 55(3), pp.375-402

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 effects; when the prices after merger increase (decrease), the investments increase (decrease) too. Thus, we document a trade-off between static and dynamic efficiencies of mergers.

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