Do Mergers Kill Innovation? (with Joel Stiebale)

Do mergers kill innovation?This week, Joel Stiebale joins Rupprecht Podszun and Justus Haucap in the Bei Anruf Wettbewerb studio. Joel is Professor of Empirical Industrial Economics at Heinrich Heine University Düsseldorf and has studied what happens to innovation after companies merge. The results have caused quite a stir at the European Commission.Looking at more than 3,000 mergers reviewed and cleared by the European Commission, Joel Stiebale and Florian Szücs find that innovation declines after mergers, while markups and profits increase. The findings raise questions about a common argument in merger cases: that mergers create efficiencies that ultimately benefit consumers.So what does this mean for merger control? The debate in Europe often focuses on whether merger policy is too strict and prevents European companies from gaining the scale they need to compete internationally. But do the new findings point in the opposite direction? Is merger control perhaps not strict enough? Joel, Justus and Rupprecht discuss what we can – and cannot – learn from the study.And finally, with the announcement just around the corner, the three make their predictions: Who will win this year’s Nobel Prize in Economic Sciences?

Further Information

Study on the impact of mergers reviewed by the European Commission on innovation and markups - An empirical Investigation

Video of the Online-Workshop of EU Competition