Airline horizontal mergers and productivity: Empirical evidence from a quasi-natural experiment in China

Jia Yan, Xiaowen Fu, Tae Hoon Oum and Kun Wang

International Journal of Industrial Organization, 2019, vol. 62, issue C, 358-376

Abstract: The identification of possible efficiency gains is a core issue in the analysis of mergers. However, empirical studies are generally subject to bias caused by merger endogeneity. In the early 2000s, the Chinese government pursued a strategy of merging small firms in key industries to create large enterprise groups. Mergers created by this policy provide a rare quasi-natural experiment to investigate the effect of mergers. We take the opportunity to apply the difference-in-differences approach to identify the effect of mergers on the efficiency of Chinese airlines. Overall, our analysis suggests that the mergers increased the productivity of Chinese airlines.

Keywords: Horizontal merger; Productive efficiency; Airline mergers (search for similar items in EconPapers)
JEL-codes: D24 G34 L93 L98 R48 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:62:y:2019:i:c:p:358-376

DOI: 10.1016/j.ijindorg.2018.01.004

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