Does Market Concentration Promote or Reduce New Product Introductions? Evidence from US Processed Food Industry

This study presents an empirical test of the relationship between market concentration and new product introductions. The analysis uses an annual panel data set of the US processed food industry that spans across the period 1983 to 2004. The estimations depict that market concentration increases new product introductions and product introductions spur subsequent mergers. These results provide evidence in support of the new 'anticipatory merger theory', which predicts new product introductions to occur in anticipation of future mergers