introductions spur subsequent mergers in the food industry. Hence positive relationship
between market concentration and product introductions and positive effect of new
product introductions on subsequent mergers provide evidence in support of the
anticipatory mergers theory. Based on data compiled from various issues of ‘The Food
Institute Report’ we found that new product introductions in the food industry are
predominantly attributed to smaller firms as the top 20 firms introduced on an average
about 15 percent of the total number of annual new products during the period 1999 to
2002 while the top 4 firms introduced only 5 percent of the new products. This anecdotal
evidence further strengthens our conclusion that product introduction occurs in
anticipation of mergers in the US processed food industry.
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