Ex post Merger Evaluation in the U.K. Retail Market for Books

Abstract

This paper evaluates the price effects of the merger of two major U.K. book retailers. We use a dataset containing monthly scanner data on a sample of 200 books in 50 local markets for four years around the merger. We compare the price changes after the merger in shops located in areas where both chains were present before the merger and in areas where only one chain was present. We also investigate the country‐wide effect of the merger. We find that the merger did not result in any price increase either at the local or at the national level.

Evaluating merger effects

“…In other words, geographic dispersion was considered to be a pre‐determined choice variable that could not be easily changed within a short period of time, thereby allowing the researcher to separate “close” and non‐close competitors that would be differentially affected by the merger. This idea has since been widely implemented across different retail markets and countries to consider both price and non‐price effects of mergers (Aguzzoni et al, 2016; Allain et al, 2017; Argentesi et al, 2018).…”

“…Our paper both relates to and contributes to several strands in the literature. First, it contributes to the growing literature on retrospective merger evaluation using both pre‐ and post‐merger data (see Borenstein (1990) and Kim and Singal (1993) on airline mergers, Panetta and Focarelli (2003) on banking, McCabe (2002) on journal publishers, Ashenfelter and Hosken (2010) and Ashenfelter et al (2015) on food and non‐food grocery sectors, Ashenfelter et al (2013) on the home appliance sector, Hastings (2004) and Taylor and Hosken (2007) on retail gasoline, Connor et al (1998) and Dafny (2009) on hospitals, Björnerstedt and Verboven (2016) on pharmaceuticals, Allain et al (2017) and Argentesi et al (2018) on supermarkets, and Aguzzoni et al (2016) on the retail market for books). Our work draws specifically upon the literature that uses geographic variation in markets to define areas in which the two merging parties overlap versus areas where they do not.…”

A Retrospective Evaluation of the GDF/Suez Merger: Effects on the Belgian Gas Hub

“…Note further that in terms of general liquidity, the Dutch TTF and Belgian ZEE hub are also comparable pre-merger. Indeed, the EC Energy Inquiry (2007, p. 41) states that "On each of the most important Continental hubs, incumbents were significant buyers during the [2003][2004] Before we explain in detail our identification strategy, it is worth noting that when mergers are subject to authorisation, it is common in the retrospective evaluation literature to consider the date of the decision as the main relevant date to assess the effect of the merger (see for instance Choné and Linnemer, 2012;Björnerstedt and Verboven, 2016;Aguzzoni et al, 2016). In the case under consideration, there was a time lapse of more than one and a half years between the Commission's decision and the actual consummation of the merger and its remedies.…”

Development Prospects of Industrial Economics Based on Mobile Information Systems

“…On the one hand, the formation and development of industry is the result and manifestation of the development of social productive forces. And it is the driving force of the economic downturn [9]. On the other hand, industrial development has effectively raised the level of production and promoted the development and improvement of productivity.…”