MultimarketContactandMergersandAcquisitionsTheCasesofSouthwestAirlinesandAirtranAirwaysintheUSAirlineIndustry

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1 Global Journal of Management and Busness Research: A Admnstraton and Management Volume 17 Issue 1 Verson 1.0 Year 2017 Type: Double Blnd Peer Revewed Internatonal Research Journal Publsher: Global Journals Inc. (USA) Onlne ISSN: & Prnt ISSN: Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry By Ryota Asah Fukuyama Hese Unversty Abstract- Many studes have emprcally shown that multmarket contact (MMC) has collusve effects n the US arlne ndustry. The US arlne ndustry has recently undergone large changes. For example, some arlnes have mplemented mergers and acqustons (M&A), whle Low-cost carrers (LCCs) have matured over tme and developed accordng to multple busness models. Few prevous emprcal studes of MMC have taken these changes nto account. Thus, ths paper analyzes the mpact of M&A on the effects of MMC whle takng nto consderaton the presence of LCCs. We focus on Southwest s acquston of Artran Arways and estmate the smultaneous demand and prce equatons usng unbalanced panel data for the fourth quarters of 20, 2010, 2011, 2012, 2013 and 20. We madethree fndngs. Frst, MMC has collusve effects on arlnes prcng n the US arlne ndustry. Second, the effect of MMC on Southwest Arlnes prcng dd not ncrease after the acquston of Artran Arways. Thrd, Southwest Arlnes rvals may show more collusve effects of MMC after an acquston s made by Southwest Arlnes. GJMBR-A Classfcaton: JEL Code: M00 MultmarketContactandMergersandAcqustonsTheCasesofSouthwestArlnesandArtranArwaysntheUSArlneIndustry Strctly as per the complance and regulatons of: Ryota Asah. Ths s a research/revew paper, dstrbuted under the terms of the Creatve Commons Attrbuton- Noncommercal 3.0 Unported Lcense permttng all non-commercal use, dstrbuton, and reproducton n any medum, provded the orgnal work s properly cted.

2 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry Ryota Asah 1 Abstract- Many studes have emprcally shown that multmarket contact (MMC) has collusve effects n the US arlne ndustry. The US arlne ndustry has recently undergone large changes. For example, some arlnes have mplemented mergers and acqustons (M&A), whle Low-cost carrers (LCCs) have matured over tme and developed accordng to multple busness models. Few prevous emprcal studes of MMC have taken these changes nto account. Thus, ths paper analyzes the mpact of M&A on the effects of MMC whle takng nto consderaton the presence of LCCs. We focus on Southwest s acquston of Artran Arways and estmate the smultaneous demand and prce equatons usng unbalanced panel data for the fourth quarters of 20, 2010, 2011, 2012, 2013 and 20. We made three fndngs. Frst, MMC has collusve effects on arlnes prcng n the US arlne ndustry. Second, the effect of MMC on Southwest Arlnes prcng dd not ncrease after the acquston of Artran Arways. Thrd, Southwest Arlnes rvals may show more collusve effects of MMC after an acquston s made by Southwest Arlnes. I. Introducton M ultmarket contact (MMC) refers to a stuaton n whch there are many nter-frm rvalres between a lmted number of frms n multple markets. Many researchers have suggested that MMC leads to mutual forbearance and weakens competton. In partcular, MMC has had collusve effects n the arlne ndustry. Some studes have shown emprcally that MMC causes ncreases n arfares and a decrease n the qualty of servces. In recent years, the arlne ndustry has experenced many mergers and acqustons (M&A). M&A decrease the number of arlnes and ncrease market concentraton. As a result, many studes have emprcally shown that M&A weaken the ntensty of competton n the arlne ndustry. On the other hand, arlnes may mprove ther cost effcency through M&A. Accordngly, some analyses have mpled that M&A nduce competton n the arlne ndustry. In addton, M&A may extend MMC and may ntensfy the collusve effect of MMC. The effect of MMC may change through the renforcement of market power by M&A. However, few studes have analyzed the relatonshp between MMC and M&A. In ths paper, we emprcally analyze the mpact of M&A on the collusve effects of MMC. Ths analyss focuses on the acquston of Artran Arways by Southwest Arlnes. We estmate the smultaneous equaton system of the prce and demand functon to analyze the changes nduced n the effects of MMC by M&A. We made three fndngs. Frst, MMC has a collusve effect on arfares. Second, the collusve effect of MMC on Southwest Arlnes dd not change before and after ts acquston of Artran Arways. Thrd, the collusve effects of MMC on Southwest s rvals became weaker after the acquston. These have the poltcal mplcaton that full-servce carrers (FSCs) may renforce the collusve effect of MMC through M&A conducted by low-cost carrers (LCCs) 2. In secton 2, we revew the lterature on MMC, M&A and LCCs. In secton 3, we descrbe the econometrc model used n ths study and our data. In secton 4, we show the emprcal results. In secton 5, we state our concludng remarks. II. Lterature Revew Researchers have ponted out for a long tme that MMC has collusve effects (for example, Bernhem and Whnston (1990)). These effects have been emprcally analyzed n dversfed frms(scott(1982), Fenberg(1985), Scott(1991)), the bankng ndustry (Plloff(1999), DeBons and Ferrando (2000), Coccorese and Pelleccha(20), Kasman and Kasman(2015)), the manufacturng ndustry(stckland(1985), Hughes and Oughton (1993)), the cement ndustry (Jans and Rosenbaum(1996)), the cellular phone ndustry(parker and Röller(1997), Busse (2000), Domnguez et al(2016)), and others. Many of these studes showed the collusve effects of MMC, whch rases prces and decreases the qualty of servce. Some studes have focused on MMC n the arlne ndustry. Sandler (1988) showed that MMC ntensfed the competton n the US arlne ndustry before the ndustry was deregulated. Evans and Kessdes (1994) demonstrated that MMC ncreased arfares n US arlne ndustry usng panel data from 1985 to Sngal (1996) found that MMC caused A 2017 Global Journal of Management and Busness Research ( ) Volume XVII Issue I Verson I Year 9 1 Author: Fukuyama Hese Unversty, Faculty of Busness Admnstraton. e-mal: asah@hese-u.ac.jp 2 LCCs are arlnes whch keep operatng expenses low and set low arfares.

3 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry Global Journal of Management and Busness Research ( A ) Volume XVII Issue I Verson I Year sgnfcant ncreases n arfares on long-dstance routes. Baum and Korn (1999) showed an nversed-u sharp relatonshp between MMC and the rates of market entry and market ext. Ther results mpled that the rates of entry and ext ncrease as MMC s extended. Gmeno and Woo (1999) suggested that the scope of economc ntensfy the collusve effect of MMC. Most of these studes showed that MMC had an ant-compettve effect n the US arlne ndustry n the 1980s. In addton, Zhang and Round (20) found that MMC dd not rase arfares n the Chnese arlne ndustry from 2002 to There have been many studes on M&A n the arlne ndustry. Most of these ndcated that M&A strengthened market power (Borensten(1990),Km and Sngal(1993),and Morrson(1996)). Although these analyses focused on M&A n the 1980s, there has been an ncreasng trend n M&A n recent years. As a result, many researchers have been studyng recent M&A. Luo (20) showed that arfares dd not ncrease after the merger between Delta Arlnes and Northwest Arlnes on routes n whch these arlnes partcpated. Hüschelrath and Müller(2015) ndcated that the arfareson routes run by Delta and Northwest Arlnes ncreased n the short run after the merger between these arlnes. Hüschelrath and Müller(20) suggested that there were many routes on whch arfares ncreased as a result of the merger of US Arways and Amerca West. In many emprcal studes of the arlne ndustry, Blotkach (2011) dentfed a relatonshp between MMC and M&A. Blotkach (2011) analyzed the relatonshp between MMC and flght frequences before and after the merger of US Arways and Amerca West Arlnes and suggested that MMC had an effect on frequency and that the merger ntensfed ths effect. Recent studes have shown have shown a varety of results when assessng M&A. The development of LCCs may be a factor n the varaton n the effects of M&A. Many studes have analyzed the mpact of LCCs. Dresner et al. (1996) and Wndle and Dresner (1999) showed that LCCs caused arlnes to sgnfcantly decrease ther rates. Vowles(2000) found that LCCs had statstcally sgnfcant arfare-lowerng effects. Morrson (2001) also showed that the entry of LCCs nfluenced arfares on the LCCsʼ potental routes. Goolsbee and Syverson (2008) found that ncumbents sgnfcantly decrease ther arfares when threatened wth the entry of Southwest Arlnes. Huse and Olvera (2012) found that ncumbents responded to an actual entry but not to a potental entry, and that product dfferentaton responded to an actual entry but not to a potental entry, and that product dfferentaton softened the ntensty of the reacton n the Brazlan arlne ndustry. Murakam et al (2015) found that new carrers dscounted ther prces at the tme of an entry and rased ther arfares year by year n the Japanese arlne ndustry. Recently, some studes have researched the effects of MMC and LCCs. Zou et al (2011a) researched the mpact of MMC between hgh-cost carrers and LCCs on arfares. They showed that MMC rase yelds and that MMC between hgh-cost carrers and LCCs dd not have sgnfcant effects. Zou et al (2011b) studed the effect of MMC n the nternatonal arlne ndustry. They found that MMC has collusve effects n the nternatonal arlne ndustry and that MMC between allance members has postve mpacts on arfares. Murakam and Asah (2011) ndcated that the collusve effect of MMC may be weakened by competton wth LCCs. On the other hand, LCCs have dversfed n recent years. Some studes have focused on ths change n the strateges of LCCs and FSCs. Dzedzc and Warnock-Smth (2016) ndcated that LCCs try to capture busness passengers. Dobruszke et al (2017) suggested that LCCs are ncreasng ther routes from major arports. Daft and Albers (2015) showed emprcally that the smlarty among arlnes busness models ncreases over tme. Arlnes have executed M&A and changed ther corporate organzaton and market power. Some LCCs have also tred to transform ther tradtonal strateges nto new strateges that nclude some characterstcs of FSCs. Although many studes have focused on MMC n the US arlne ndustry, varatons of the arlne ndustry may change prevous researches results. Based on these prevous studes, we analyzed the mpact of M&A conducted by Southwest Arlnes on the effect of MMC n the US arlne ndustry. III. Econometrc Model and Data To analyze the effect of MMC and the mpact of M&A, many studes have used a prce functon. We estmated smultaneous demand and prce equatons to determne the effect of MMC on prcng behavor by usng unbalanced panel data for the fourth quarters of the years 20 20(20Q4, 2010Q4, 2011Q4, 2012Q4, 2013Q4 and 20Q4) n the US arlne ndustry. Ths analyss employs the followng model specfcatons. The demand functon s gven by: 9 k logqjt = α0 + α1 logpjt + α2 log Dst j + α3 log INCjt + α4 log POPjt + τtd _ tmet + ϕkd _ MTj + νjt t= 10 k= 2 (1)

4 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry The prce functon s gven by: log pjt = β0 + β1 log qjt + β2 log MCjt + β3 log HHI jt + ( β4 + γ1wf + δ1wf + γ2wfr + δ 2 WFR + γ3wn + δ 3 WN + γ4wnr + δ 4 WNR + γ5exflr + δ 5 EXFLR + γ6cwnr + δ6cwnr j )log MMCjt + β5lcc + τtd _ tmet + εjt, t= 10 where p jt and q jt are the average arfare and output of route j of carrer n year t, respectvely. Dst j s the dstance between a par of ctes on route j, INC jt s the arthmetc per capta ncome of route j n year t, POPjt s the arthmetc average of the O/D populaton n year t, D_tme t s the tme dummy varable that takes 1 for year t(the benchmark year of ths bnary varable s 20Q4), k and D _ MT j s a bnary varable that takes 1 for a market where k carrers compete (the benchmark k market of ths bnary varable s a duopoly). D _ MT j s ntroduced to control the market sze n the demand equaton. MC s the margnal cost of route j for carrer jt n year t 3. s the Herfndahl ndex of route j n year t. Snce a hgh concentraton may lead to strong market power, the parameter wll be postve. s the MMC of route j for carrer n year t. In ths paper, MMC s defned as followed: MMCjt = m aklt = DkjtDljt j= 1 n akltdkjtdljt l k f jt (f jt 1) / 2 where n s the number of frms and m s the number of routes. f jt s the number of frms n route j n year t. We analyze the mpact of M&A on the effect of MMC to estmate the coeffcents of the bnary varables WF, WF, WFR, WFR, WN, WN, WNR, ( 3 We used the followng equaton to calculate margnal cost: λ Dst j MC jt AC t = Dst j, where AC AFL t s the average cost of t carrer n year t. AFL t s the average dstance flown by arlne n year t. Ths method has been used by Brander and Zhang (1990, 1993), Oum et al. (1993), Murakam(2011a, 2011b), and Zhang et al. (20). To obtan λ, we estmate the followng prce equaton by the nonlnear least-squares method. pjt {AC (Dst / AFL ) λ t j t Dst j } η = + ε η (1+ )s jt. θ jt η s the route-specfc prce elastcty of demand, varaton and (3) θ s the conduct s jt s the market share of route j of carrer n year t. Prevous studes, such as Brander and Zhang (1990, 1993) and Murakam (2011a, 2011b), found that λ ranges between 0.15 and Ths study uses WNR, EXFLR, EXFLR, CWNR and CWNR ) and test the hypotheses regardng whether these coeffcents were equal before and after the acquston (for example, we test the null hypothess γ 1 = δ1 ). The superscrpt numbers n the varables represent years. WF and WF are bnary varables that take 1 for Southwest Arlnes, n routes where Artran Arways was present n 20Q4 and 20Q4. WFR and WFR are bnary varables that take 1 for carrers n 20Q4 and 20Q4 whch operated on routes where Southwest Arlnes competed wth Artran Arways n 20Q4. WN and WN are bnary varables that take 1 for Southwest Arlneson routes where Artran Arways was not present n 20Q4 and 20Q4. WNR and WNR are bnary varables that take 1 for carrers that compete wth Southwest Arlnes and that operated from 20Q4 to 20Q4on routes where Artran Arways was not present n 20Q4 and 20Q4. EXFLR and EXFLR are bnary varables that take 1 for carrers whch operated n 20Q4 and 20Q4 on routes where Artran Arways exted and Southwest Arlnes dd not enter after the acquston. CWNR and CWNR are bnary varables that take 1 for carrers whch operated n 20Q4 and 20Q4 on routes from whch Artran Arways had exted and n whch Southwest Arlnes have operated nstead of t after the acquston. We used unbalanced panel data from the US arlne ndustry for the fourth quarters of the years We chose the fourth quarters n order to analyze more compettve behavor n a perod when arlnes avoded compettve behavor because demand n the fourth quarters s large. These carrer-specfc data from scheduled operatons n cty-par routes were drawn from Data Base DB1A. Per-capta ndvdual ncome and demographc data were obtaned from the Regonal Accounts Data, Bureau of Economc Analyss. Carrers that dd not have a 10% market share n duopoly markets, carrers that dd not have a 5% share n tropoly or greater markets and monopoly markets were excluded. Carrers reported as carrer XX (carrers that are not fled n IATA codes) n DB1A were also omtted. We drew cost data from the Ar Carrer Fnancal Reports, Form 41 Fnancal Data to calculate the margnal cost. Descrptve statstcs for the contnuous varables are gven n Table 1.The number of samples was 26,248. (2) Global Journal of Management and Busness Research ( A ) Volume XVII Issue I Verson I Year

5 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry Table 1: Descrptve statstcs Name Mean St. Dev Mnmum Maxmum p (Arfare) q (Passenger) 1, , , HHI(Herfndahl ndex) 4, , , Dst(Dstance) 1, , Global Journal of Management and Busness Research ( A ) Volume XVII Issue I Verson I Year MC(Margnal cost) POP(Populaton) 4,112,300 2,506, ,480 16,324,000 INC(Per-capta ncome) 40, , , ,5.000 MMC (Multmarket contact) IV. Emprcal Results The demand and prce functons were estmated smultaneously by an teratve three stage least square (3SLS). Table 2 ndcates the emprcal results and Wald test results. The coeffcents n the demand functon were sgnfcantly reasonable sgn. The coeffcents of the output, the margnal cost and the Herfndahl ndex n the prce functon were also sgnfcantly reasonable sgn. The coeffcent of MMC was sgnfcantly postve. Ths suggests that MMC rases arfares n the US arlne ndustry. The coeffcents of WF and WF are not sgnfcant. Ths ndcates that the effect of MMC on Southwest Arlnes prcng dd not change before and after the acquston on routes where Southwest Arlnes and Artran Arways were present n 20Q4. The coeffcents of WFR and WFR were sgnfcantly negatve. Ths result ndcated that the collusve effect of MMC on rvals prcng went down on routes where Southwest Arlnes and Artran Arways were present. The coeffcent of WFR was also sgnfcantly lower than that of WFR. Ths mpled that the acquston ncreased the collusve effect of MMC among rvals. The coeffcents of WN and WN were sgnfcantly postve and the coeffcent of WN was hgher than the coeffcent of WN. These fndngs suggested that Southwest Arlnes may show a more collusve effect of MMC on routes where Artran Arways had not been present and may have become more compettve by extendng MMC through the acquston of Artran. The coeffcents of WNR and WNRwere sgnfcantly negatve. Ths ndcated that the antcompettve effect decreased n routes where Southwest Arlnes was present. The value of WNR was hgher than that of WNR. Ths mpled that the acquston ncreases the collusve effect of MMC on rvals prcng on routes where Southwest Arlnes has operated and Artran Arways has not operated. The coeffcents of CWNR and CWNR were sgnfcantly negatve and the value of CWNR was hgher than that of CWNR. These results showed that MMC may have a collusve effect by replacng Artran Arways wth Southwest Arlnes. We also dd not reject the null hypothess. Ths mpled that the collusve effect of MMC n the US arlne ndustry may depend on the presence of Southwest Arlnes. The value of EXFLR s sgnfcantly negatve, and the value of EXFLR s not sgnfcant. These fndngs ndcated that the antcompettve effect of MMC on rvals became stronger as a result of Artran Arways ext. Ths mpled that the collusve effect of MMC mght be weakened by competton wth LCCs and be renforced by the ext of LCCs. These results characterze the relatonshp between MMC and M&A. Frst, Southwest Arlnes dd not show a more collusve effect of MMC after the acquston. Southwest Arlnes ncreased ts market share n the US arlne ndustry by the acquston. As a result, Southwest Arlnes may have more compettve awareness to prepare forts rvals compettve behavor as they attempt to retake ther market shares. Second, Southwest s rvals showed a more collusve effect of MMC after the acquston. Ths may result from the reducton n the number of LCCs resultng from the acquston. Because Southwest Arlnes has superorty, ts rvals may attempt to avod compettve behavors when takng MMC nto account.

6 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry Table 2: Emprcal results and Wald test results Prce functon Demand functon Varable Coeffcent S E Varable Coeffcent S E q *** p *** MC *** 0.0 Dst *** HHI *** 0.0 INC *** MMC( β 4 ) *** POP *** LCC *** MT *** WF ( γ 1 ) MT *** WF ( δ 1 ) MT *** WFR ( γ 2 ) *** MT *** WFR ( δ 2 ) ** MT *** WN ( γ 3 ) *** MT *** WN ( δ 3 ) *** MT *** WNR ( γ 4 ) *** tme * WNR ( δ 4 ) *** tme *** CWNR ( γ 6 ) *** tme ** CWNR ( δ 6 ) *** tme *** EXFLR ( γ 5 ) *** tme *** EXFLR ( δ 5 ) CONSTANT *** tme *** tme *** tme *** tme *** tme -0.2 *** CONSTANT *** Wald Test System R Test of overall sgnfcance γ ( = Null hypothess Statstc Null hypothess Statstc Null hypothess Statstc γ1 = δ = δ 4 + γ 0 γ2 = δ.156 *** 2 γ3 = δ *** = γ = * γ *** γ5 δ5 3.8 * 6 δ6 4 2 = β4 + γ4 = *** β4 + γ5 = *** 4 + δ2 = 0 β4 + δ4 = *** β4 + δ5 = *** 4 + γ6 = 0 β4 + δ6 =.849 *** β β *** 0 β *,** and *** show that the null hypothess s rejected at sgnfcance levels 10%, 5% and 1%. V. Conclusons Many studes have shown that MMC has a collusve effect n the US arlne ndustry. However, the US arlne ndustry has undergone a varety of changes. For example, LCCs have grown n sze, and many arlnes have mplemented M&A. In analyses of MMC, a lot of attenton has not been pad to these changes. Ths paper focused on the acquston of Artran Arways by Southwest Arlnes, whch has been enlargng ts network, and analyzed the mpact of M&A on the effect of MMC. We made three man fndngs. Frst, MMC has collusve effects on arlnes prcng. Second, Southwest Arlnes MMC effect dd not ncrease after the 71) acquston of Artran. Thrd, Southwest Arlnes rvals may show more collusve effects of MMC after the acquston of Artran by Southwest. These results have poltcal mplcatons. The regulatory agency must take nto account the possblty that M&A wth LCCs result n MMC havng stronger collusve effects. M&A by LCCs may ncrease the number of routes where LCCs are present, and thus arlnes may face a more compettve envronment. However, arlnes may engage n more collusve behavors as a result of MMC. In the case of M&A that decrease the number of LCCs, the collusve effect of MMC also ncreases by dsentanglng FSCs from the pressures of competton wth LCCs. When a regulatory Global Journal of Management and Busness Research ( A ) Volume XVII Issue I Verson I Year

7 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry Global Journal of Management and Busness Research ( A ) Volume XVII Issue I Verson I Year 2017 agency determnes whether to approve M&A n the arlne ndustry, t must take nto account the change nduced by M&A n the effects of MMC. Further study s requred on a number of ssues. Frst, analyses of these topcs should be contnued over a long term. Arlnes may take a long tme to optmze ther organzatons after M&A. We should analyze MMC n keepng wth these optmzng processes. Second, we should take account of other M&As. Some arlnes have mplemented M&As recently. Because ths paper dd not dd not take nto account the mpacts of these M&As, we have to analyze the effects of MMC after consderng them. References Références Referencas 1. Baum, J. A., & Korn, H. J. (1999). Dynamcs of dyadc compettve nteracton. Strategc Management Journal, 39(2), Bernhem, B. D., & Whnston, M. D. (1990). Multmarket contact and collusve behavor. The RAND Journal of Economcs, 21(1), Blotkach, V. (2011). Multmarket contact and ntensty of competton: evdence from an arlne merger. Revew of Industral Organzaton, 38(1), Borensten, S. (1990). Arlne mergers, arport domnance, and market power. The Amercan Economc Revew, 80(2), Brander, J. A., & Zhang, A. (1990), Market Conduct n the Arlne Industry: An Emprcal Investgaton, RAND Journal of Economcs, 21(4), Brander, J. A., & Zhang, A. (1993), Dynamc Olgopoly Behavor n the Arlne Industry, Internatonal Journal of Industral Organzaton.11(3), Busse, M. R. (2000). Multmarket contact and prce coordnaton n the cellular telephone ndustry. Journal of Economcs & Management Strategy, 9(3), Coccorese, P., & Pelleccha, A. (20). Multmarket contact and proftablty n bankng: evdence from Italy. Journal of Fnancal Servces Research, 35(3), Daft, J., & Albers, S. (2015). An emprcal analyss of arlne busness model convergence. Journal of Ar Transport Management, 46, De Bons, R., & Ferrando, A. (2000). The Italan bankng structure n the 1990s: testng the multmarket contact hypothess. Economc Notes, 29(2), Dobruszkes, F., Gvon, M., & Vowles, T. (2017). Hello major arports, goodbye regonal arports? Recent changes n European and US low-cost arlne arport choce. Journal of Ar Transport Management, 59, Domínguez, B., Garrdo, E., & Orcos, R. (2016). Multmarket contact and performance: Evdence from emergng economes. BRQ Busness Research Quarterly, 19(4), Dresner, M., Ln, J. S. C., & Wndle, R. (1996). The mpact of low-cost carrers on arport and route competton. Journal of Transport Economcs and Polcy, 30(3), Dzedzc, M., & Warnock-Smth, D. (2016). The role of secondary arports for today's low-cost carrer busness models: The European case. Research n Transportaton Busness & Management, 21, Evans, W. N., & Kessdes, I. N. (1994). Lvng by the" golden rule": Multmarket contact n the US arlne ndustry. The Quarterly Journal of Economcs, 1(2), Fenberg, R. M. (1985). "Sales-at-Rsk": A Test of the Mutual Forbearance Theory of Conglomerate Behavor. Journal of Busness, 36(2), Gmeno, J., & Woo, C. Y. (1999). Multmarket contact, economes of scope, and frm performance. Academy of Management Journal, 42(3), Goolsbee, A. & Syverson. C, (2008), How do ncumbents respond to the threat of entry? Evdence from the major arlnes, Quarterly Journal of Economcs, 123(4), Hughes, K., & Oughton, C. (1993). Dversfcaton, mult-market contact and proftablty. Economca, 60(238), Huse, C & Olvera, V.M. (2012). Does product dfferentaton soften prce reactons to entry? Evdence from the arlne ndustry. Journal of Transport Economcs and Polcy (JTEP), 46(2), Hüschelrath, K., & Müller, K. (20). Arlne networks, mergers, and consumer welfare. Journal of Transport Economcs and Polcy (JTEP), 48(3), Hüschelrath, K., & Müller, K. (2015). Market power, effcences, and entry evdence from an arlne merger. Manageral and Decson Economcs, 36(4), Jans, I., & Rosenbaum, D. I. (1997). Multmarket contact and prcng: Evdence from the US cement ndustry. Internatonal Journal of Industral Organzaton, 15(3), Kasman, S., & Kasman, A. (2016). Multmarket contact, market power and fnancal stablty n the Turksh bankng ndustry. Emprcal Economcs, 50(2), Km, E. H., & Sngal, V. (1993). Mergers and market power: Evdence from the arlne ndustry. The Amercan Economc Revew, 83(3),

8 Multmarket Contact and Mergers and Acqustons: The Cases of Southwest Arlnes and Artran Arways n the US Arlne Industry 26. Luo, D. (20). The prce effects of the Delta/Northwest arlne merger. Revew of Industral Organzaton, 44(1), Morrson, S. A. (1996). Arlne mergers: A longer vew. Journal of Transport Economcs and Polcy, 30(3), Morrson, S. A. (2001). Actual, adjacent, and potental competton estmatng the full effect of Southwest Arlnes. Journal of Transport Economcs and Polcy (JTEP), 35(2), Murakam, H., (2011a). Tme effect of low-cost carrer entry and socal welfare n US Large Ar Markets, Transportaton Research Part E, 47(3), Murakam, H., (2011b), An emprcal analyss of nter-frm rvalry between Japanese full-servce and low-cost carrers, Pacfc Economc Revew, 16(1), Murakam, H., & Asah, R. (2011). An Emprcal analyss of the effect of multmarket contacts on US ar carrers' prcng behavors. The Sngapore Economc Revew, 56(4), Murakam, H., Amano, Y., & Asah, R. (2015). Dynamc effect of nter-frm rvalry on arfares: Case of Japan's full-servce and new ar carrers. Journal of Ar Transport Management, 44, Oum, T. H., Zhang, A., & Zhang, Y. (1993). Inter-frm rvalry and frm-specfc prce elastctes n deregulated arlne markets. Journal of Transport Economcs and Polcy, 27(2), Parker, P. M., & Röller, L. H. (1997). Collusve conduct n duopoles: multmarket contact and cross-ownershp n the moble telephone ndustry. The RAND Journal of Economcs, 28(2), Plloff, S. J. (1999). Multmarket contact n bankng. Revew of Industral Organzaton, (2), Sandler, R. D. (1988). Market share nstablty n commercal arlne markets and the mpact of deregulaton. The Journal of Industral Economcs, 36(3), Scott, J. T. (1982). Multmarket contact and economc performance. The Revew of Economcs and Statstcs, 64(3), Scott, J. T. (1991). Multmarket contact among dversfed olgopolsts. Internatonal Journal of Industral Organzaton, 9(2), Sngal, V. (1996). Arlne mergers and multmarket contact. Manageral and Decson Economcs, 17(6), Strckland, A. D. (1985). Conglomerate mergers, mutual forbearance behavor and prce competton. Manageral and Decson Economcs,6(3), Vowles, T. M. (2000). The effect of low fare ar carrers on arfares n the US. Journal of Transport Geography, 8(2), Wndle, R., & Dresner, M. (1999). Compettve responses to low cost carrer entry. Transportaton Research Part E: Logstcs and Transportaton Revew, 35(1), Zhang, Q., Yang, H., Wang. O.,& Zhang. A, (20). Market power and ts determnants n the Chnese arlne ndustry, Transportaton Research Part A, 64, Zhang, Y., & Round, D. K. (20). Polcy mplcatons of the effects of concentraton and multmarket contact n chna s arlne market. Revew of Industral Organzaton, 34(4), Zou, L., Dresner, M., & Wndle, R. (2011a). Many felds of battle how cost structure affects competton across multple markets. Journal of Transport Economcs and Polcy (JTEP), 45(1), Zou, L., Yu, C., & Dresner, M. (2011b). Multmarket contact, allance membershp, and prces n nternatonal arlne markets. Transportaton Research Part E: Logstcs and Transportaton Revew, 48(2), Global Journal of Management and Busness Research ( A ) Volume XVII Issue I Verson I Year

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