Evaluating horizontal mergers in Swedish district courts using plant capacity concepts

Abstract

This contribution investigates the effects of horizontal mergers and acquisitions on the plant capacity utilisation of Swedish district courts over the period 2000–2017. More specifically, we empirically illustrate the decomposition of input-oriented and output-oriented plant capacity utilisation concepts. Moreover, we also explore the impact of convexity on input-oriented and output-oriented measures of plant capacity in the short-run in an attempt to discover the potential rationale behind the merger wave. To the best of our knowledge, we are the first to assess horizontal mergers by employing plant capacity utilisation concepts. The results indicate that the horizontal mergers improve plant capacity utilisation. Furthermore, the nonconvex frontier method provides a more conservative estimate of plant capacity changes of this merger wave.