They hope to spread research costs over a large market. A third is the development of computers and the Internet. William Shepherd, an economist at the University of Massachusetts, Amherst, has a more skeptical view. He sees corporate executives as often seeking dominant positions in their markets. They are driven by greed or pride.
Most mergers work out badly.
In recent years, the stock of the acquiring company most often takes a tumble, he notes. Antitrust agencies are stretched thin to keep up with the more than 25-fold jump in merger volume since the end of the Bush administration. Antitrust division numbers are similar. Fines or settlements with companies more than cover the costs. Because of globalization, the two agencies are cooperating closely with the competition department in the European Union.