Date of this Version
University of Nebraska Studies: New Series no. 43
PRIMARY AND SECONDARY ECONOMIC EFFECTS OF CORPORATE MERGERS
A considerable amount of time and research effort has been devoted to the analysis of the effects of corporate mergers upon industrial concentration.1 Likewise, much research has been undertaken with respect to the relationship between economic concentration and market performance. Indeed, the primary economic concern associated with mergers and acquisitions is the possible anticompetitive effects which may accompany them. Thus, the Federal Trade Commission staff has pointed out: "The major public policy concern arising from mergers is that they have the effect of entrenching or creating market power, thereby rendering competition ineffective as a regulatory mechanism."
Although the anti-competitive potential associated with mergers must remain the primary focus of economic research in the merger area, there exists an equally important need to assess secondary economic impacts of corporate marriages. In light of the phenomenal increase in mergers during the past decade and the fact that the recent merger wave is increasingly of a conglomerate nature, these "secondary" economic effects, in fact, may push their way to the forefront of policy concern. In particular, the local economic impacts of corporate acquisitions require careful appraisal. Also, the directional flow of corporate control and its accompanying geographic concentration should be of interest to researchers and policy makers.