The Impact of Vertical Theories of Harm on Investor Returns: An Event Study of US Vertical Mergers

Round 1

Reviewer 1 Report

Dear Authors,

I would like to congratulate you and your team for doing such a good research work in your submitted paper for publication in this prestigious journal. Topic is very interesting and I liked the topic and I personally like to appreciate your efforts to present your research work in such a nice manner. But before your work will be recommended or will be given any possible acceptance few comments must be incorporated for improving the quality of your work as well as for further publication in this reputed journal. I have the following minor observations or queries and comments which may further enhance your piece of work. The authors require to modify the following points in detail.

1. In abstract, please bring in your 2-3 special quantitative achievements from the results of this study in context of environment by mixing up the research objectives and problems. Please make your abstract within 250 words only. Also, check spellings for many words, which are wrong and are written in hurry.
2. The introduction part is required to add few more sentences to increase the strength of this article and kindly bring in the research problem, objective, novelty and explain it in last paragraph of the section of Introduction.
3. Add few more sentences in the very beginning of introduction explaining about your paper’s contribution or attempts for dealing or presenting solutions for a specific problem/s and your special contribution with this research paper.
4. Please present the methodology section in a compact graphical format as well.
5. Literature review part is very weak kindly revise it.
6. Please present your literature review in a concise SmartArt chart format.
7. Just after the Methodology, please mention the benefits of your research for the society at large with respect to evaluating its key determinant.
8. The section of “Results” must explain research problems, solutions and the contribution of your study theoretically with around 500-750 words.
9. Please insert graphical presentations for your results.
10. Explain why have you deployed this study in a separate section of “Policy suggestions” just before the section of “Conclusions”.

I think above all points will make this study more relevant and in bridging the gap with literature. Literature review is not done properly by the authors the section of review of literature needs to be revise by including the earlier relevant published work from this journal.

Looking forward for your revised submission.

 

Author Response

Please see attachment

Author Response File: Author Response.docx

Reviewer 2 Report

The paper entitled "The Impact of Vertical Harm on Merger Outcomes: An Event study of US Vertical and Horizontal Mergers" focuses on the vertical theories of harm by comparing the abnormal returns of acquirers, targets and the two combined in vertical and horizontal mergers that were challenged by regulators as potentially anti-competitive. The paper tackles an interesting issue and is well-written in terms on English. However, it is badly prepared (the guidelines for authors have been totally ignored) and needs some additional serious work in presentation of its methodology, results, as well as the discussion of outcomes. Below are my comments and suggestions for the authors:

1. In the Introduction, the novelty of the paper needs to be better explained. Moreover, the structure of the paper needs to be presented explaining the contribution of each section. The paragraph "Our results indicate that target cumulative abnormal returns (CARs) for vertical mergers are similar to those for horizontal mergers..." belongs to the Conclusions and cannot be used in the Introduction.

2. The Literature review is better to be extended (think about 20-25 additional relevant sources).

3. In Section 3, the origin of the data should be clearly presented and explained. What "140 mergers that were announced between 1994 and 2018" are those and where the data was obtained and by whom?

4. The most important question is "So what?". What do the author(s) want to show by this study and what are the wider implications?

5. The Conclusions need to be extended to embrace the policy implications (are the results transferrable and why?), limitations of the study, as well as the pathways for further research in this field.

6. The manuscript needs to be prepared in order with the guidelines for authors.

Author Response

Please see the attachment

Author Response File: Author Response.docx

Reviewer 3 Report

I suggest to better contextualise the contribution highlighting, above all, how it helps to integrate the recent literature on the subject: only n. 6 of n. 29 bibliographic references of the article date back to the last decade and only n. 2 to the last five years (one in 2018 and one in 2019) … 

Not surprisingly, as stated in note no. 5 p. 10: “The paper was written in 2016 with 46 vertical mergers taken from 1994-2013. The list of mergers was revised in 2018 to include an additional 12 mergers that occurred from 2014 through 2018.”

Author Response

The paper has been revised to include more recent empirical papers, such as,

Beck, M. Morton, F.S. (2021) Evaluating the Evidence on Vertical Mergers, Review of Industrial Organization.  59 273-302.

Jurich, S., and Walker, M. (2019). What Drives Merger Outcomes? The North American Journal of Economics and Finance, 48  757–775.

Wong-Ervin, Koren, Antitrust Analysis of Vertical Mergers: Recent Developments and Economic Teachings (October 30, 2018). ABA Antitrust Source, February 2019, Available at SSRN: https://ssrn.com/abstract=3273344 or http://dx.doi.org/10.2139/ssrn.3273344

 

Round 2

Reviewer 2 Report

The paper has been revised by two key points have not been tackled or taken on board by the authors: a) the list of references is still too short (even though 4 additional papers have been added) - it would be better to add additional 15-20 at least; and b) the paper is not in the journal's format (please see the guidelines for authors). All these issues need to be resolved before the paper can be accepted for publication.

Author Response

See attachment

Author Response File: Author Response.docx

Reviewer 3 Report

Comments for author File: Comments.pdf

Author Response

See attachment - reviewer 3 specific comments are at the bottom.  

Author Response File: Author Response.docx