Review of Industrial Organization

, 35:217

First online:

Market Structure after Horizontal Mergers: Evidence from the Banking Industry

  • Robert M. AdamsAffiliated withDivision of Research and Statistics, Board of Governors of the Federal Reserve System Email author 
  • , Richard L. JohnsonAffiliated withAntitrust Division, Department of Justice
  • , Steven J. PilloffAffiliated withSchool of Management, George Mason University

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Antitrust agencies use measures of market structure to evaluate the likely competitive effects of proposed mergers, but little is known about how measures of market structure change over time, particularly after consummation of mergers and acquisitions. This paper analyzes the changes in market structure 3 and 5 years after mergers in the US banking industry. Our analysis suggests that concentration decreases and the number of banks increases in banking markets where mergers resulted in high concentration levels. In markets where the level of concentration changed by a relatively large amount, our findings are more ambiguous, as the level of concentration decreases, but no effect is found on the number of competitors.


Antitrust policy Competition Market structure Banking industry mergers

JEL Classification

G21 G28 G34 L11 L13