The Impact of Mergers on Concentration: A Study of Eleven West German Industries

Abstract

THE recent increase in horizontal mergers in West Germany may have been one of the reasons for adopting a tougher anti-merger law in 1973. How important mergers were in increasing concentration is not really known. In this paper we attempt to analyse and quantify this impact on i i (four digit S.I.C.) manufacturing industries.' For the period between 1958 and 1971, the effect of mergers on concentration is separated from the effects of internal growth, and exit and entry of firms into the industry.2 This is the first such systematic analysis of the relationships between changes in industrial concentration and the level of merger activities for West Germany.