Work

Startup acquisitions and merger policy

Year: 2026

Type: article

Abstract: Key Points The prevalence of killer acquisitions is likely overstated, even from a purely theoretical perspective, as the replacement effect that they rely on often fails to hold. Despite claims by advocates of more lenient merger control, the prospect of acquisition does not necessarily induce startups to increase their investment in, or likelihood of pursuing, more disruptive innovation. Welfare-maximizing merger policy must adopt a dynamic perspective, balancing short-term competitive harms against long-term incentives for choosing more disruptive innovation directions. We provide practical recommendations for the design and enforcement of merger control involving innovative startups.

Source: Journal of European Competition Law & Practice

DOI: 10.1093/jeclap/lpag017

Authors: Christopher Teh, Chengsi Wang

Institutions: Toulouse School of Economics, Université de Toulouse, Monash University

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,850