Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2020-01-27 Revision-Date: 2020-03-31 Number: 20-005/VII Author-Name: Timo Klein Author-Workplace-Name: University of Amsterdam Title: Event Studies in Merger Analysis: Review and an Application Using U.S. TNIC Data Abstract: There is a growing concern that U.S. merger control may have been too lenient, but empirical evidence remains limited. After reviewing event studies as a method to acquire empirical insights into the competitive effects of mergers, I propose a novel application using Hoberg-Phillips TNIC data. This application allows for the ready approximation of abnormal stock market returns of likely competitors to 1,751 of the largest U.S. mergers since 1997. I document that likely competitors experience on average an abnormal return of close to one percent around a merger announcement. Abnormal returns are also strongly associated with concerns of market power, which suggests that competitors benefit at least in part because of an anticipation of anti-competitive effects -- and hence insufficient merger control. Classification-JEL: G14, G34, L13, L40 Keywords: Mergers, Antitrust, Event Studies, Text-Based Network Industry Classification File-URL: https://papers.tinbergen.nl/20005.pdf File-Format: application/pdf File-Size: 404329 bytes Handle: RePEc:tin:wpaper:20200005