【Macro Seminar】Mergers, Firm Size, and Volatility in a Granular Economy

  • 研討會日期 : 2023-02-24
  • 時間 : 10:30
  • 主講人 : Professor Jackie M.L. Chan
  • 地點 : Conference room B110
  • 主持人 : Professor Han Yang
  • 演講者簡介 : Professor Jackie M.L. Chan received his Ph.D. in Economics from Stanford University in 2015. He is currently an Assistant Professor at Aarhus University. His research interests are international trade, foreign direct investment, and Chinese and Asian economies.
  • 演講摘要 : We study the impact of mergers and acquisitions (M&A) at the micro and macro levels. A negative size-volatility relationship implies that merger-induced growth lowers firm-level volatility. We demonstrate this relationship is characterized by the linear combination of log-log and log-linear functions, where the latter arises from variable markups and suggests that volatility declines disproportionately with firm size. At the aggregate level, mergers increase market concentration and amplify granular fluctuations. Thus, aggregate volatility rises despite the fall in post-merger firm-level volatility. We build a quantitative model of horizontal mergers and our counterfactual analysis shows that mergers increase aggregate volatility by 9.3%.