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ID098622
Title ProperCompetition effects of mergers
Other Title Informationan event study of the German electricity market
LanguageENG
AuthorKeller, Andreas
Publication2010.
Summary / Abstract (Note)This paper investigates the competition effects of the entry of Vattenfall into the German electricity market. While the competition authorities supported the entry by approving Vattenfall's acquisition of three regional utilities, other market participants raised concerns over the emergence of an upcoming oligopoly in the German market for power generation. We contrast the efficiency hypothesis postulating pro-competitive effects of mergers with the market power hypothesis postulating anti-competitive effects. For the analysis of the two opposing hypotheses, we use an event study approach to the stock prices of Vattenfall's competitors in the German market. While we find no empirical evidence for increased market power in the German electricity market due to Vattenfall's mergers, there is some indication for efficiency increases. We therefore cannot oppose the view of the competition authorities predicting an overall positive effect for consumers as a result of Vattenfall's entry into the German electricity market.
`In' analytical NoteEnergy Policy Vol. 38, No. 9; Sep 2010: p.5264-5271
Journal SourceEnergy Policy Vol. 38, No. 9; Sep 2010: p.5264-5271
Key WordsElectricity Market ;  Event Study ;  Horizontal Merger