The Impact of Mergers on Quality Provision: Evidence from the Airline Industry |
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| Authors: | Jeffrey T. Prince Daniel H. Simon |
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| Affiliation: | 1. Kelley School of Business at Indiana University, Bloomington, Indiana, U.S.A.;2. School of Public and Environmental Affairs at Indiana University, Bloomington, Indiana, U.S.A. |
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| Abstract: | We examine how mergers affect quality provision by analyzing five U.S. airline mergers, focusing on on‐time performance (OTP). We find that airline mergers have minimal negative impacts on OTP, and likely result in long‐run improvements due to efficiencies. Importantly, we show that this finding is not driven by post‐merger changes in price that could affect OTP. Consequently, at least in the case of airlines, policymakers should not, as a rule, fear the negative quality effects of mergers. |
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