Mergers, Firm Size, and Volatility in a Granular Economy - Archive ouverte HAL
Article Dans Une Revue Toxicological Sciences Année : 2025

Mergers, Firm Size, and Volatility in a Granular Economy

J. M. L. Chan
  • Fonction : Auteur
H. Qi

Résumé

We study the firm dynamics associated with mergers and acquisitions (M&A) and their implications at the micro and macro levels. Our paper presents three main findings: (i) mergers generate a more fat-tailed firm-size distribution, thereby amplifying granular fluctuations and increasing aggregate volatility; (ii) the impact of mergers depends on strategic market power and endogenous markups; and (iii) under endogenous markups, we provide a novel characterization of the firm size-volatility relationship in which volatility declines disproportionately with size. We build a quantitative model of domestic horizontal mergers and find a sizeable impact of mergers on aggregate volatility using counterfactual analysis.
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Dates et versions

hal-04719146 , version 1 (03-10-2024)
hal-04719146 , version 2 (09-10-2024)

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J. M. L. Chan, H. Qi. Mergers, Firm Size, and Volatility in a Granular Economy. Toxicological Sciences, 2025, 55, ⟨10.1016/j.red.2024.101254⟩. ⟨hal-04719146v2⟩

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