{"title":"Mergers and organizational disruption: Evidence from the US airline industry","authors":"Julia González, Jorge Lemus, Guillermo Marshall","doi":"10.1111/jems.12560","DOIUrl":null,"url":null,"abstract":"<p>Merger-specific efficiencies alleviate anticompetitive concerns of horizontal mergers. However, organizational challenges inherent in mergers pose a threat to achieving these efficiencies and could negatively impact the merged firm's productivity and market outcomes. We separately measure the organizational and strategic effects of mergers on quality provision using administrative data from the US airline industry, leveraging an industry-specific regulation. We find that organizational challenges (e.g., combining workforces) cause a significant reduction in the quality supplied by a merged firm. In contrast, strategic effects (e.g., market strategy) have a minor impact on quality. Also, we find that a merger can reduce the performance of both merging firms. Our results suggest a merger's organizational challenges create uncertain efficiency gains.</p>","PeriodicalId":47931,"journal":{"name":"Journal of Economics & Management Strategy","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2023-10-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jems.12560","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economics & Management Strategy","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jems.12560","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1
Abstract
Merger-specific efficiencies alleviate anticompetitive concerns of horizontal mergers. However, organizational challenges inherent in mergers pose a threat to achieving these efficiencies and could negatively impact the merged firm's productivity and market outcomes. We separately measure the organizational and strategic effects of mergers on quality provision using administrative data from the US airline industry, leveraging an industry-specific regulation. We find that organizational challenges (e.g., combining workforces) cause a significant reduction in the quality supplied by a merged firm. In contrast, strategic effects (e.g., market strategy) have a minor impact on quality. Also, we find that a merger can reduce the performance of both merging firms. Our results suggest a merger's organizational challenges create uncertain efficiency gains.