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Consolidation on Aisle Five: Effects of Mergers in Consumer Packaged Goods

SSRN Electronic Journal
2021
  • 1
    Citations
  • 1,640
    Usage
  • 1
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    1
    • Citation Indexes
      1
  • Usage
    1,640
    • Abstract Views
      1,246
    • Downloads
      394
  • Captures
    1
  • Ratings
    • Download Rank
      150,976

Article Description

We study the effects of the average merger in the consumer packaged goods industry, a sector making up over 10% of US GDP. Using an event-study design and linked retail scanner data from hundreds of consummated mergers, we find that mergers raise prices at the target by 0.9%. Under nested CES demand, we provide sufficient statistics to recover average consumer welfare effects as a function of effects on price, store and product availability, and firm exit. Accounting for availability and exit is quantitatively important. The decline in consumer welfare is equivalent to a 1.9-3.7% price increase at the target firm.

Bibliographic Details

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