2025/03/20 by Gaurab Aryal, Aryal, Gaurab, Anirban Chattopadhyaya +3
Business, Management and Accounting · Economics, Econometrics and Finance · #Aviation Industry Analysis and Trends #Corporate Finance and Governance #FOS: Economics and business #General Economics (econ.GN)
paper · pdf · doi:10.48550/arxiv.2503.15785
openalex publication_date 2025/03/20 · openalex created_date 2025/04/01 · openalex updated_date 2026/07/28
We bridge quasi-experimental and structural approaches for robust merger evaluation. First, we show that the difference-in-differences (DiD) equation is the "reduced form" of a structural model, where demand and cost parameters identify price effects of mergers even when the DiD approach faces identification challenges. Second, we propose a synthetic GMM approach by applying synthetic DiD weights to structural moment conditions to improve estimates when only a few treated markets are available. Applying this methodology to three airline mergers, we find modest efficiency gains entirely offset by increased coordination. The synthetic GMM refinement sharpens findings, uncovering anti-competitive effects standard approaches miss.