Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition

Vanessa Alviarez, Keith Head and Thierry Mayer

Abstract: We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4–7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU.

Keywords: multinationals; oligopoly; markups; concentration; firm effects; brands; frictions; mergers and acquisitions; competition policy (search for similar items in EconPapers)
Date: 2021-07-12
New Economics Papers: this item is included in nep-com and nep-int
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03389199v2
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Related works:
Working Paper: Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition (2021)
Working Paper: Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition (2021)
Working Paper: Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition (2021)
Working Paper: Global giants and local stars: How changes in brand ownership affect competition (2020)
Working Paper: Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition (2020)
Working Paper: Global giants and local stars: How changes in brand ownership affect competition (2020)
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