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JOURNAL ARTICLE
Did Tough Antitrust Enforcement Cause the Diversification of American Corporations?
John G. Matsusaka
The Journal of Financial and Quantitative Analysis
Vol. 31, No. 2 (Jun., 1996), pp. 283-294
Published by: Cambridge University Press on behalf of the University of Washington School of Business Administration
DOI: 10.2307/2331183
https://www.jstor.org/stable/2331183
Page Count: 12
A central question in financial economics remains unresolved: What caused the rise and decline of corporate diversification during the last four decades? Even though a number of plausible explanations have been advanced, there is little more than anecdotal support for or against any of them.
One of the most venerable and enduring of these explanations is the “antitrust hypothesis.” According to this explanation, firms diversified in the 1960s because antitrust authorities prevented them from expanding in their home industries. When antitrust policy became less stringent in the 1980s, firms were able to expand horizontally, leading them to de-diversify and refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, “[t]he 1950 Merger Act has had a strongly adverse effect on horizontal mergers by large companies.” More recently, Shleifer and Vishny ((1991), p. 50) speculated that
The most likely reason for diversification [in the 1960s] was the antitrust policy that, after the Celler-Kefauver Act passed in 1950, turned fiercely against mergers between firms in the same industry. Unable to acquire businesses related to their own, flush with cash, and facing a favorable market for equity issues, acquirers bought companies outside their industries.
The view that antitrust contributed substantially to corporate diversification also enjoys abundant anecdotal support.1 But it has its share of skeptics, including Scherer (1980) and Comment and Jarrell (1995), who note that diversification appears to be common in countries with significantly different antitrust policies than the United States.
The purpose of this paper is to make an empirical assessment of the antitrust hypothesis. Antitrust enforcement in the 19605 focused on how a merger would affect market concentration. Consequently, large horizontal mergers were more likely to have been challenged than small horizontal mergers. Diversifying mergers, in contrast, were unlikely to have been challenged regardless of size. If the antitrust hypothesis is correct, then, acquisition-minded firms avoided large horizontal acquisitions, and either i) substituted into small horizontal acquisitions and mergers with firms of any size in unrelated industries, or ii) dropped out of the merger market altogether. In either case, there should have been a relatively high fraction of diversification acquisitions among large mergers and a relatively low fraction among small mergers during the conglomerate merger wave of the 1960s and 1970s. This implication does not find support in a sample of 549 mergers by NYSE firms during 1968: diversification was no more common among large mergers than small mergers. The finding is robust to a number of different measures of diversification, and also holds for samples of mergers during 1971 and 1974.
In addition to the statistical evidence, I examine diversification patterns in the United Kingdom, Canada, Germany, and France in the late 1960s and early 1970s. Although none of these countries had legal restrictions on horizontal growth comparable to those in the United States, they also experienced diversification waves. This corroborates the negative view of the antitrust hypothesis that emerges from the American data. It seems too much to conclude that antitrust played no role whatsoever—surely it was a factor in some decisions—but the evidence suggests that the primary cause of corporate diversification lies elsewhere.
International Evidence
A second reason to be skeptical about the antitrust hypothesis is that increasing corporate diversification has been a feature of most Western economies in the postwar years even though tough legal restrictions on horizontal growth were unique to the United States.
In Britain, competition policy was governed by the 1956 Restrictive Trade Practices Act, intended to discourage cartels. A 1965 act gave the government the power to control certain mergers when they were against the “public interest.” These restrictions were rarely applied as the government was more interested in encouraging horizontal combinations than discouraging them (OECD (1974)). Despite this favorable environment for horizontal mergers, the United Kingdom also experienced a diversification merger wave in the 1960s and early 1970s. The peak was in 1965 measured by numbers, and 1971 measured by value of transactions (OECD ( 1974)). The number of takeovers that involved entry into new industries rose from 9.3 percent in 1949—1953 to 38.8 percent in 1954—1958, and 46.6 percent in 1969—1973 (Goudie and Meeks (1982)). British firms diversified internally as well. In 1950, 23 of the 100 largest British firms were diversified; by 1970, 54 of the top 100 were diversified (Chandler (1990)). A number of conglomerates even arose in the early 1970s, most notably BTR, the Hanson Trust, GEC, and Tarmac.
Mergers in Canada were governed by the Combines Investigation Act, which prohibited mergers that lessened competition “to the detriment ...of the public”(Section 2). The few court judgements that had been issued by the middle of the 1970s took a narrow view of what constituted illegal mergers, essentially only those that would have created a “virtual monopoly” (OECD (1974)). Even so, by the early 1970s, diversification had become the primary type of Canadian merger. Only 43 percent of Canadian mergers were horizontal in 1971—1973 and only 30 percent in 1977—1979 (Baldwin and Gorecki (1990)).
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发表于 2019-8-23 23:21:50
，考场上第一篇就是这个，花了很长时间，不会做。
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