Merger Efficiencies in the U.S. Telecommunications Industry

This paper investigates whether productivity growth has increased among ILECs that have merged since the 1996 Telecommunications Act and whether the merged firms performed better than firms that did not merge in terms of productivity growth over the years 1996-2005. The productivity growth measures are obtained from a Malmquist index during pre-merger and post-merger periods. The empirical results provide some evidence of a positive merger effect, although this effect diminishes over time. In addition, this paper finds that non-merged firms underperform in terms of average productivity growth.