IDEAS home Printed from https://ideas.repec.org/a/kap/revind/v62y2023i1d10.1007_s11151-022-09878-7.html
   My bibliography  Save this article

What can be Expected from Mergers After Deregulation? The Case of the Long-Distance Bus Industry in France

Author

Listed:
  • Thierry Blayac

    (CEE-M
    Faculté d’économie)

  • Patrice Bougette

    (CNRS, GREDEG)

Abstract

This study estimates the competitive effects of horizontal mergers in the French long-distance bus industry. We examine the two mergers that followed the 2015 Deregulation Act (the Macron Law); we use an exclusive and exhaustive dataset that covers eight consecutive quarters. We analyze the merger effects by comparing bus links that were affected by mergers with those that were unaffected; we use difference-in-differences estimations. We find that the two mergers are associated with price increases of about 13.5% immediately that then moderate to 5.3%; and with the frequency decreases from − 21.5 to − 25.7%; we observe no effects on load factors. These findings show evidence of short-run anticompetitive effects, while the mergers under study were not scrutinized by the French competition agency, as they were below the notification thresholds.

Suggested Citation

  • Thierry Blayac & Patrice Bougette, 2023. "What can be Expected from Mergers After Deregulation? The Case of the Long-Distance Bus Industry in France," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(1), pages 63-97, February.
    • Handle: RePEc:kap:revind:v:62:y:2023:i:1:d:10.1007_s11151-022-09878-7
    DOI: 10.1007/s11151-022-09878-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11151-022-09878-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11151-022-09878-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Yan, Jia & Fu, Xiaowen & Oum, Tae Hoon & Wang, Kun, 2019. "Airline horizontal mergers and productivity: Empirical evidence from a quasi-natural experiment in China," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 358-376.
    2. Shen, Ying, 2017. "Market competition and market price: Evidence from United/Continental airline merger," Economics of Transportation, Elsevier, vol. 10(C), pages 1-7.
    3. Farrell, Joseph & Shapiro, Carl, 1990. "Horizontal Mergers: An Equilibrium Analysis," American Economic Review, American Economic Association, vol. 80(1), pages 107-126, March.
    4. Chen, Yongmin & Gayle, Philip G., 2019. "Mergers and product quality: Evidence from the airline industry," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 96-135.
    5. Jeffrey T. Prince & Daniel H. Simon, 2017. "The Impact of Mergers on Quality Provision: Evidence from the Airline Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 65(2), pages 336-362, June.
    6. Gremm, Cornelia, 2018. "The effect of intermodal competition on the pricing behaviour of a railway company: Evidence from the German case," Research in Transportation Economics, Elsevier, vol. 72(C), pages 49-64.
    7. Dürr, Niklas S. & Hüschelrath, Kai, 2017. "Patterns of entry and exit in the deregulated German interurban bus industry," Transport Policy, Elsevier, vol. 59(C), pages 196-208.
    8. Dario Focarelli & Fabio Panetta, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Market for Bank Deposits," American Economic Review, American Economic Association, vol. 93(4), pages 1152-1172, September.
    9. Carlton, Dennis & Israel, Mark & MacSwain, Ian & Orlov, Eugene, 2019. "Are legacy airline mergers pro- or anti-competitive? Evidence from recent U.S. airline mergers," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 58-95.
    10. Kang Hua Cao & Betty Krier & Chia-Mei Liu & Brian McNamara & Jerrod Sharpe, 2017. "The Nonlinear Effects of Market Structure on Service Quality: Evidence from the U.S. Airline Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(1), pages 43-73, August.
    11. Fageda, Xavier & Sansano, Sergi, 2018. "Factors influencing prices and frequencies in the interurban bus market: Evidence from Europe," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 266-276.
    12. Somnath Das, 2019. "Effect of Merger on Market Price and Product Quality: American and US Airways," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(3), pages 339-374, November.
    13. Beria, Paolo & Nistri, Dario & Laurino, Antonio, 2018. "Intercity coach liberalisation in Italy: Fares determinants in an evolving market," Research in Transportation Economics, Elsevier, vol. 69(C), pages 260-269.
    14. Crozet, Yves & Guihéry, Laurent, 2018. "Deregulation of long distance coach services in France," Research in Transportation Economics, Elsevier, vol. 69(C), pages 284-289.
    15. Aarhaug, Jørgen & Fearnley, Nils, 2016. "Deregulation of the Norwegian long distance express coach market," Transport Policy, Elsevier, vol. 46(C), pages 1-6.
    16. Doi, Naoshi & Ohashi, Hiroshi, 2019. "Market structure and product quality: A study of the 2002 Japanese airline merger," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 158-193.
    17. Yves Crozet & Laurent Guihéry, 2018. "Deregulation of long distance coach services in France," Post-Print halshs-01856648, HAL.
    18. Bilotkach, Volodymyr & Lakew, Paulos Ashebir, 2014. "On sources of market power in the airline industry: Panel data evidence from the US airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 288-305.
    19. Franco Mariuzzo & Peter L. Ormosi, 2019. "Post-merger Price Dynamics Matters, So Why Do Merger Retrospectives Ignore It?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(3), pages 403-429, November.
    20. Aarhaug, Jørgen & Farstad, Eivind & Fearnley, Nils & Halse, Askill Harkjerr, 2018. "Express coaches: An up-hill battle after liberalization?," Research in Transportation Economics, Elsevier, vol. 72(C), pages 82-91.
    21. Paul W. Dobson & Claudio A. Piga, 2013. "The Impact Of Mergers On Fares Structure: Evidence From European Low-Cost Airlines," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1196-1217, April.
    22. Fabio Panetta & Dario Focarelli, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Italian Market for Bank Deposits," CEIS Research Paper 10, Tor Vergata University, CEIS.
    23. Peters, Craig, 2006. "Evaluating the Performance of Merger Simulation: Evidence from the U.S. Airline Industry," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 627-649, October.
    24. Jan-Eric Nilsson & Roger Pyddoke & Staffan Hultén & Gunnar Alexandersson, 2013. "The Liberalisation of Railway Passenger Transport in Sweden," Journal of Transport Economics and Policy, University of Bath, vol. 47(2), pages 307-312, May.
    25. Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrice Bougette & Frédéric Marty, 2024. "Transport and Competition Law," Working Papers halshs-04763179, HAL.
    2. Blayac, Thierry & Bougette, Patrice & Laroche, Florent, 2024. "An analysis of intermodal competition and multiproduct Incumbent's strategies in the French market: What drive high-speed trains' prices and frequencies?," Transport Policy, Elsevier, vol. 156(C), pages 25-42.
    3. Patrice Bougette & Frédéric Marty, 2024. "Transport and Competition Law," Working Papers halshs-04763179, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Yahua, 2020. "Evaluating the price effects of two airline mergers in China," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    2. Paul W. Dobson & Claudio A. Piga, 2009. "Mergers and Business Model Assimilation: Evidence from Low-Cost Airlines Takeovers," Discussion Paper Series 2009_2, Department of Economics, Loughborough University, revised Feb 2009.
    3. Reynolds, Tim & White, Peter, 2022. "Forty years’ experience of deregulated express coach services in Britain," Research in Transportation Economics, Elsevier, vol. 94(C).
    4. Kitto, Andrew R., 2024. "The effects of non-Big 4 mergers on audit efficiency and audit market competition☆," Journal of Accounting and Economics, Elsevier, vol. 77(1).
    5. Friberg, Richard & Romahn, André, 2015. "Divestiture requirements as a tool for competition policy: A case from the Swedish beer market," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 1-18.
    6. Robert Town & Douglas Wholey & Roger Feldman & Lawton R. Burns, 2006. "The Welfare Consequences of Hospital Mergers," NBER Working Papers 12244, National Bureau of Economic Research, Inc.
    7. Joel Stiebale & Florian Szücs, 2022. "Mergers and market power: evidence from rivals' responses in European markets," RAND Journal of Economics, RAND Corporation, vol. 53(4), pages 678-702, December.
    8. Orley Ashenfelter & Daniel Hosken, 2008. "The Effect of Mergers on Consumer Prices: Evidence from Five Selected Case Studies," NBER Working Papers 13859, National Bureau of Economic Research, Inc.
    9. Robert Kulick, 2017. "Ready-to-Mix: Horizontal Mergers, Prices, and Productivity," Working Papers 17-38, Center for Economic Studies, U.S. Census Bureau.
    10. repec:diw:diwwpp:dp1321 is not listed on IDEAS
    11. Somnath Das, 2019. "Effect of Merger on Market Price and Product Quality: American and US Airways," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(3), pages 339-374, November.
    12. Motta, Massimo & Tarantino, Emanuele, 2021. "The effect of horizontal mergers, when firms compete in prices and investments," International Journal of Industrial Organization, Elsevier, vol. 78(C).
    13. Choné, Philippe & Linnemer, Laurent, 2008. "Assessing horizontal mergers under uncertain efficiency gains," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 913-929, July.
    14. Sven‐Olof Fridolfsson & Johan Stennek, 2010. "Industry Concentration and Welfare: On the Use of Stock Market Evidence from Horizontal Mergers," Economica, London School of Economics and Political Science, vol. 77(308), pages 734-750, October.
    15. Matthew Weinberg, 2007. "The Price Effects of Horizontal Mergers: A Survey," Working Papers 62, Princeton University, Department of Economics, Center for Economic Policy Studies..
    16. Linde, Sebastian & Siebert, Ralph B., 2023. "Exploring the incremental merger value from multimarket and technology arguments," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    17. Matthew Weinberg, 2007. "The Price Effects of Horizontal Mergers: A Survey," Working Papers 62, Princeton University, Department of Economics, Center for Economic Policy Studies..
    18. Li, Lu & Wan, Yulai & Yang, Dong, 2024. "Do shipping alliances affect freight rates? Evidence from global satellite ship data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    19. Gugler, Klaus & Szücs, Florian, 2016. "Merger externalities in oligopolistic markets," International Journal of Industrial Organization, Elsevier, vol. 47(C), pages 230-254.
    20. Orley Ashenfelter & Daniel Hosken, 2008. "The Effect of Mergers on Consumer Prices: Evidence from Five Selected Case Studies," NBER Working Papers 13859, National Bureau of Economic Research, Inc.
    21. Robert Clark & Mario Samano, 2022. "Incentivized Mergers and Cost Efficiency: Evidence from the Electricity Distribution Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 70(4), pages 791-837, December.

    More about this item

    Keywords

    Long-distance bus industry; Mergers and acquisitions; Deregulated industry; Consolidation; Intramodal competition; Difference-in-differences estimation;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revind:v:62:y:2023:i:1:d:10.1007_s11151-022-09878-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.