Concern over conglomerate mergers increased dramatically in the latter part of the twentieth century. An acceleration in conglomerate merger activity rekindled firms’ takeover fears and swamped trustbusters, and attention focused on the political and economic issues surrounding conglomerate mergers. Of particular importance is the possibility that conglomerate mergers may increase aggregate concentration and eventually create a ‘zaibatsu’ economy. This book, first published in 1984, addresses the issue by examining the mutual forbearance hypothesis. More specifically, do multi-market contacts among diversified firms affect market competition?
1. Introduction 2. Multi-Market Contacts, Firm Interdependence and Industrial Profitability Appendix A. A Simple Model of Firm Interdependence 3. The Sample Appendix B. Sample Firms 4. Horizontal Interdependence and Industry Price-Cost Margins Appendix C. Data Sources 5. Vertical Interdependence and Industry Price-Cost Margins 6. Horizontal Interdependence, Vertical Interdependence and Industry Price-Cost Margins 7. Conclusions