Abstract
Using an ecological lens, we extend strategic management and industrial organization theory to investigate the performance effects of horizontal mergers. We theorize that firms differ in their ability to benefit from horizontal mergers; that the products involved in the merger differ in their ability to attain and sustain any increase in performance above their premerger level; and that resource niches in which each product competes differ in terms of competitive constraints. We then test these predictions using longitudinal data specified at the product-market level, a unit of analysis that is less influenced by aggregation bias than are industry, firm, and even line-of-business level data. Our findings demonstrate how organizational ecology, when coupled with strategic management and industrial organization economic theories, can enrich our understanding of horizontal mergers.