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Ecological investigation of firm effects in horizontal mergers

Author

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  • Michael Lubatkin
  • William S. Schulze
  • Avinash Mainkar
  • Ronald W. Cotterill

Abstract

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.

Suggested Citation

  • Michael Lubatkin & William S. Schulze & Avinash Mainkar & Ronald W. Cotterill, 2001. "Ecological investigation of firm effects in horizontal mergers," Strategic Management Journal, Wiley Blackwell, vol. 22(4), pages 335-357, April.
    • Handle: RePEc:bla:stratm:v:22:y:2001:i:4:p:335-357
    DOI: 10.1002/smj.162
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    Cited by:

    1. Luo, Yadong & Han, Binjie, 2009. "Graft and business in emerging economies: An ecological perspective," Journal of World Business, Elsevier, vol. 44(3), pages 225-237, July.
    2. Wang, Daojuan & Hain, Daniel S. & Larimo, Jorma & Dao, Li T., 2020. "Cultural differences and synergy realization in cross-border acquisitions," International Business Review, Elsevier, vol. 29(3).
    3. Jiang Wei & Yang Yang & Sali Li, 2021. "Mirror or no mirror? Architectural design of cross-border integration of Chinese multinational enterprises," Asia Pacific Journal of Management, Springer, vol. 38(4), pages 1399-1430, December.
    4. Cui, Yu & Jiao, Jie & Jiao, Hao, 2016. "Technological innovation in Brazil, Russia, India, China, and South Africa (BRICS): An organizational ecology perspective," Technological Forecasting and Social Change, Elsevier, vol. 107(C), pages 28-36.
    5. Wang, Qiong & Qiu, Muqing, 2023. "Strength in numbers: Minority shareholders' participation and executives' pay-performance sensitivity," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    6. Vargas-Hernández José G. & Rakowska Joanna & Vargas-González M. C. Omar C., 2022. "Interface of Organisational Ageing and Organisational Ecology Theory," Marketing of Scientific and Research Organizations, Sciendo, vol. 45(3), pages 57-70, October.
    7. Jen-Jen Tseng & Ping-Hung Chou, 2009. "Mimetic isomorphism and its effect on merger and acquisition activities in Taiwanese financial industries," The Service Industries Journal, Taylor & Francis Journals, vol. 31(9), pages 1451-1469, November.
    8. David R. King & Rebecca J. Slotegraaf & Idalene Kesner, 2008. "Performance Implications of Firm Resource Interactions in the Acquisition of R&D-Intensive Firms," Organization Science, INFORMS, vol. 19(2), pages 327-340, April.
    9. Richard A. D'Aveni & David J. Ravenscraft & Philip Anderson, 2004. "From corporate strategy to business-level advantage: Relatedness as resource congruence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 365-381.
    10. Valérie Moatti & Pierre Dussauge, 2005. "L’influence du mode de développement sur les avantages liés à la taille : une étude empirique dans le secteur de la grande distribution au niveau mondial," Revue Finance Contrôle Stratégie, revues.org, vol. 8(3), pages 145-176, September.
    11. Chihmao Hsieh, 2011. "Explicitly searching for useful inventions: dynamic relatedness and the costs of connecting versus synthesizing," Scientometrics, Springer;Akadémiai Kiadó, vol. 86(2), pages 381-404, February.

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