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Ecological investigation of firm effects in horizontal mergers
Author(s) -
Lubatkin Michael,
Schulze William S.,
Mainkar Avinash,
Cotterill Ronald W.
Publication year - 2001
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.162
Subject(s) - organizational ecology , industrial organization , horizontal and vertical , business , strategic management , product (mathematics) , product line , resource (disambiguation) , strategic business unit , economics , ecology , marketing , economic geography , management , biology , computer science , computer network , geometry , mathematics , engineering , geography , geodesy , manufacturing engineering
Using an ecological lens, we extend strategic management and industrial organization theory to investigate the performance effects of horizontal mergers. We theorize that firms differ in their ability to benefit from horizontal mergers; that the products involved in the merger differ in their ability to attain and sustain any increase in performance above their premerger level; and that resource niches in which each product competes differ in terms of competitive constraints. We then test these predictions using longitudinal data specified at the product–market level, a unit of analysis that is less influenced by aggregation bias than are industry, firm, and even line‐of‐business level data. Our findings demonstrate how organizational ecology, when coupled with strategic management and industrial organization economic theories, can enrich our understanding of horizontal mergers. Copyright © 2001 John Wiley & Sons, Ltd.