The Effects of Horizontal Mergers on Competition: The Case of the Northern Securities Company

Several recent articles have studied the competitive effects of horizontal mergers by examining rival firms' stock price reactions to the merger announcement and subsequent antitrust challenge. These articles have consistently failed to find any evidence of anticompetitive effects. This article considers two alternative explanations for the previous findings, and it sheds some new light on the issue by presenting a case study of the merger that resulted in the formation of the Northern Securities Company in 1901.