Vertical Integration, Mergers, And Global Engagement (VINTAGE)

What effects do vertical mergers and acquisitions (M&A) have on the success of companies, their pricing, market power and innovation? While the focus of competition policy has traditionally been on horizontal mergers, recent sector-specific studies suggest that a reassessment of vertical mergers is necessary. This research project aims to analyse vertical mergers for a broader range of industries. Modern econometric techniques and a unique dataset on the vertical relationships of individual companies are used for the analysis. The results can provide valuable information for policy makers and competition regulators.

Research objectives

•     To analyse the effects of vertical M&As on efficiency and competition in different industries and countries.
•     To analyse the direct and indirect effects on company performance, prices and market power.
•     To analyse the role of innovation in the context of vertical integration.
•     To compare cross-border and domestic transactions.

Methodology

This project is based on an extensive data set that includes information on balance sheets, profit and loss accounts, company-specific relationships (e.g. suppliers, buyers, competitors) and international transactions. The research will be conducted in three work packages:

•    Data preparation and construction of variables: Analysing the determinants of M&As and the characteristics of the firms involved.
•    Effect analysis of narrow vertical M&As: analysing the effects on firm performance, prices and indirect effects on competitors.
•    Broader perspective on vertical M&As: analysing the influence of global production and customer networks on the effects of M&As.

Duration

01.10.2024-30.09.2026

Funded by

Fritz Thyssen Foundation