TY - JOUR
T1 - Brewed in North America
T2 - Mergers, marginal costs, and efficiency
AU - Grieco, Paul
AU - Pinkse, Joris
AU - Slade, Margaret
N1 - Funding Information:
We thank Paul Johnson, the coeditor, two referees, and participants in the EARIE conference in Lisbon and the UBC Applied Micro Workshop for their valuable comments. Paul Grieco acknowledges funding from NSF Grant SES-1459905 and Margaret Slade acknowledges funding from the Phelps Centre for the Study of Government and Business Research Grant 12R21295.
Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2018/7
Y1 - 2018/7
N2 - We show how production and pricing data can be used to estimate merger-related efficiencies using pre-merger data, and we assess the changes in efficiency and marginal costs that are expected to occur post-merger. To do this, we jointly estimate firm level returns to scale, technical change, TFP growth, and price-cost markups. We implement our empirical model using data for the North American (US and Canadian) brewing industry, and we use the estimated model of firm technology to evaluate the changes that are associated with the merger between Molson and Coors. We forecast nontrivial increases in returns to scale and declines in marginal costs and we verify those results by analyzing the impact of the merger retrospectively using post-merger data.
AB - We show how production and pricing data can be used to estimate merger-related efficiencies using pre-merger data, and we assess the changes in efficiency and marginal costs that are expected to occur post-merger. To do this, we jointly estimate firm level returns to scale, technical change, TFP growth, and price-cost markups. We implement our empirical model using data for the North American (US and Canadian) brewing industry, and we use the estimated model of firm technology to evaluate the changes that are associated with the merger between Molson and Coors. We forecast nontrivial increases in returns to scale and declines in marginal costs and we verify those results by analyzing the impact of the merger retrospectively using post-merger data.
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U2 - 10.1016/j.ijindorg.2017.08.003
DO - 10.1016/j.ijindorg.2017.08.003
M3 - Article
AN - SCOPUS:85039785052
SN - 0167-7187
VL - 59
SP - 24
EP - 65
JO - International Journal of Industrial Organization
JF - International Journal of Industrial Organization
ER -