ABSTRACT
This chapter discusses the role of mergers in changing the market competition of different industries since mergers are expected to reduce the actual number of firms in the industry, which, in turn, is likely to allow the merged entity to strengthen and derive benefits from increased market power. It explores whether the merger strategy followed by firms in the Indian manufacturing sector has changed the structure of the industries, as indicated by the theoretical literature on mergers and acquisitions (M&As). Measurement of competition itself has been one of the seriously contested topics in the industrial organization literature. The competition can be viewed as either static or dynamic. Baldwin, J. and Paul Gorecki and B. Curry and K. D. George clearly bring out the debate centred on measurement issues. The notable measures of competition have been the K-firm Concentration Ratio, Hirschman-Herfindahl Index, Variance of Logarithms of Firm Size, Price-Cost Margin (PCM) and Relative Profit Difference (RPD).
