Skip to main content
SpringerLink
Log in

Conglomerate mergers and subsequent industry effects

  • Articles
  • Published:
Review of Industrial Organization Aims and scope Submit manuscript

Abstract

The focus of most studies of conglomerate mergers has been on the effects on companies involved. Of more direct relevance to antitrust policy is the question of industry effects of this type of merger. This article looks at eleven cases of “large firm/leading firm” conglomerate mergers completed between 1958 and 1970 and examines census data to see if structure or performance of the acquired “leading firm's” market was altered due to the merger. The results suggest that industry structure is not significantly affected, but that there may be adverse performance effects when the acquired firm is a leader in an unconcentrated market with substantial entry barriers.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. BUSINESS WEEK, various issues.

  2. Edwards, Corwin D., “Conglomerate Bigness as a Source of Power”, in BUSINESS CONCENTRATION AND PRICE POLICY, National Bureau of Economic Research, (Princeton, N.J.: Princeton University Press, 1955. 331–59.

    Google Scholar 

  3. FORTUNE DIRECTORY, 1968.

  4. Goldberg, Lawrence G., “The Effects of Conglomerate Mergers on Competition”, JOURNAL OF LAW AND ECONOMICS 16 (April 1973), 137–58.

    Article  Google Scholar 

  5. —, “Conglomerate Mergers and Concentration Ratios”, REVIEW OF ECONOMICS AND STATISTICS 56 (August 1974), 303–09.

    Google Scholar 

  6. Heggestad, Arnold A. and Stephen A. Rhoades, “Multi-Market Interdependence and Local Market Competition in Banking”, REVIEW OF ECONOMICS AND STATISTICS 60 (May 1978), 523–32.

    Google Scholar 

  7. Liebowitz, S.J., “Measuring Industrial Disequilibria”, SOUTHERN ECONOMIC JOURNAL 49 (July 1982), 119–136.

    Google Scholar 

  8. —, “What do Census Price-Cost Margins Measure?” JOURNAL OF LAW AND ECONOMICS 25 (October 1982), 231–46.

    Article  Google Scholar 

  9. MOODY'S HANDBOOK OF WIDELY-HELD COMMON STOCKS, various years.

  10. Mueller, Dennis C., “The Effects of Conglomerate Mergers”, JOURNAL OF BANKING AND FINANCE 1 (1977), 315–47.

    Article  Google Scholar 

  11. Mueller, Willard F., “Conglomerates: A ‘Nonindustry’”, in Adams, THE STRUCTURE OF AMERICAN INDUSTRY, 6th ed. (New York: Maemillan, 1982), 427–74.

    Google Scholar 

  12. Palmer, John, “The Profit-Performance Effects of the Separation of Ownership from Control in Large U.S. Industrial Corporations”, BELL JOURNAL OF ECONOMICS AND MANAGEMENT SCIENCE 4 (Spring 1973), 293–303.

    Google Scholar 

  13. Scherer, F.M., INDUSTRIAL MARKET STRUCTURE AND ECONOMIC PERFORMANCE, 2nd ed. (Chicago: Rand McNally, 1980).

    Google Scholar 

  14. U.S. Bureau, of the Census, CENSUS OF MANUFACTURES, 1959–1977.

  15. U.S. Federal Trade Commission, 1979 STATISTICAL REPORT ON MERGERS AND ACQUISITIONS, 1981.

  16. VALUE LINE INVESTMENT SURVEYS, 1969.

Download references

Author information

Authors and Affiliations

  1. The Pennsylvania State, Pennsylvania, USA

    Robert M. Feinberg (Associate Professor of Economics)

Authors
  1. Robert M. Feinberg
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Feinberg, R.M. Conglomerate mergers and subsequent industry effects. Rev Ind Organ 1, 128–137 (1984). https://doi.org/10.1007/BF02354348

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF02354348

Keywords

Search

Navigation