Title: The Effect of Mergers on Innovations (joint with Kaustav Das and Tatiana Mayskaya)

Abstract: We study the effect of a merger on R&D activity in a dynamic model in which there is uncertainty about the feasibility of innovation. Once an innovation has already taken place, the merger may block future innovations (cannibalization effect). The merger may increase the probability of the first innovation (appropriability effect). The merger may bring the first innovation forward in time (informational effect). The merger may increase innovation diversity (diversity effect).