When and how to rescue efficiencies from oblivion in horizontal merger control?

Abstract This article revisits merger efficiencies through six propositions. First, while many transactions fail to deliver, some mergers do generate cost, quality, and scope efficiencies. Secondly, mergers may raise or reduce innovation: theory identifies separating conditions—appropriability, complementarities, and competitive pressure—while the empirical literature increasingly documents both outcomes. Thirdly, mergers can act as an orderly exit mechanism, accelerating the redeployment of capital and assets away from ‘zombie’ firms when standalone restructuring is implausible. Fourthly, predictable acquisition paths can strengthen start-up entry by improving expected returns to innovation and venture finance. Fifthly, integration can unlock network, data, or capacity-coordination benefits that contracting cannot reliably replicate, especially under uncertainty and multi-year investment. Sixthly, merger policy should recognize these channels with a disciplined evidentiary framework that screens implausible claims yet avoids systematic under-crediting of verifiable efficiencies and dynamic gains. These propositions provide a guide pragmatic, welfare-oriented enforcement. Its adoption implies taking merger efficiencies seriously, not as advocacy, but as economics