TY - JOUR
T1 - Measuring the Effect of Multimarket Contact on Competition
T2 - Evidence from Mergers following Radio Broadcast Ownership Deregulation
AU - Waldfogel, Joel
AU - Wulf, Julie
N1 - Publisher Copyright:
© 2006 De Gruyter. All rights reserved.
PY - 2006
Y1 - 2006
N2 - This paper examines the effects of multimarket contact on advertising prices in the U.S. radio broadcasting industry. While it is in general difficult to measure the effect of multimarket contact on competition, the 1996 Telecommunications Act substantially relaxed local radio ownership restrictions, giving rise to a major and exogenous consolidation wave. Between the years of 1995 to 1998, the average extent of multimarket contact in major U.S. media markets increased by 2.5 times. Importantly, the extent of change in multimarket contact varies across markets, and the change in multimarket contact varies separately from the change in concentration. Using a panel data set on 248 geographic U.S. radio broadcast markets, 1995-1998, we find that multimarket contact has little effect on advertising prices. This paper contributes to the empirical literature on multimarket contact by analyzing a different industrial context and using longitudinal data surrounding an ownership deregulation.
AB - This paper examines the effects of multimarket contact on advertising prices in the U.S. radio broadcasting industry. While it is in general difficult to measure the effect of multimarket contact on competition, the 1996 Telecommunications Act substantially relaxed local radio ownership restrictions, giving rise to a major and exogenous consolidation wave. Between the years of 1995 to 1998, the average extent of multimarket contact in major U.S. media markets increased by 2.5 times. Importantly, the extent of change in multimarket contact varies across markets, and the change in multimarket contact varies separately from the change in concentration. Using a panel data set on 248 geographic U.S. radio broadcast markets, 1995-1998, we find that multimarket contact has little effect on advertising prices. This paper contributes to the empirical literature on multimarket contact by analyzing a different industrial context and using longitudinal data surrounding an ownership deregulation.
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U2 - 10.1515/1538-0645.1420
DO - 10.1515/1538-0645.1420
M3 - Article
AN - SCOPUS:85117439476
SN - 1935-1682
VL - 5
JO - B.E. Journal of Economic Analysis and Policy
JF - B.E. Journal of Economic Analysis and Policy
IS - 1
M1 - 17
ER -