The purpose of this research is to test the ex-post cost structure effects in horizontal mergers and acquisitions (M&A). Our proposed methodology quantifies cost structure effects empirically to inform competition policy around M&As in the airline industry. The results show that horizontal M&As involving unprofitable firms significantly reduce variable costs and increase fixed costs ex-post. M&As involving only profitable firms show no significant impact on the cost structure. We offer support that the ex-post cost structure effects of airline M&As depend on the incentives to improve efficiency, reflected in the ex-ante performance of the merging firms. We further argue that market behavior may not just depend on market structure but cost structures too, all of which should be accounted for in antitrust decision making and regulation around airline M&As.

(2020). Cost structure effects of horizontal airline mergers and acquisitions [journal article - articolo]. In TRANSPORT POLICY. Retrieved from https://hdl.handle.net/10446/258849

Cost structure effects of horizontal airline mergers and acquisitions

Redondi, Renato
2020-01-01

Abstract

The purpose of this research is to test the ex-post cost structure effects in horizontal mergers and acquisitions (M&A). Our proposed methodology quantifies cost structure effects empirically to inform competition policy around M&As in the airline industry. The results show that horizontal M&As involving unprofitable firms significantly reduce variable costs and increase fixed costs ex-post. M&As involving only profitable firms show no significant impact on the cost structure. We offer support that the ex-post cost structure effects of airline M&As depend on the incentives to improve efficiency, reflected in the ex-ante performance of the merging firms. We further argue that market behavior may not just depend on market structure but cost structures too, all of which should be accounted for in antitrust decision making and regulation around airline M&As.
articolo
2020
Gudmundsson, Sveinn Vidar; Merkert, Rico; Redondi, Renato
(2020). Cost structure effects of horizontal airline mergers and acquisitions [journal article - articolo]. In TRANSPORT POLICY. Retrieved from https://hdl.handle.net/10446/258849
File allegato/i alla scheda:
File Dimensione del file Formato  
1-s2.0-S0967070X19301726-main.pdf

Solo gestori di archivio

Versione: publisher's version - versione editoriale
Licenza: Licenza default Aisberg
Dimensione del file 588.98 kB
Formato Adobe PDF
588.98 kB Adobe PDF   Visualizza/Apri
Pubblicazioni consigliate

Aisberg ©2008 Servizi bibliotecari, Università degli studi di Bergamo | Terms of use/Condizioni di utilizzo

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10446/258849
Citazioni
  • Scopus 9
  • ???jsp.display-item.citation.isi??? 9
social impact