do vertical mergers encourage innovation 
vertical mergers can have both positive and negative effects on innovation on one hand integrating different stages of the value chain may foster collaboration and information sharing potentially leading to improved product development and innovation on the other hand vertical mergers can reduce the incentive for companies to innovate if they gain significant market power and face less competitive pressure the bottom linehorizontal mergers involve the combination of companies operating in the same industry and at the same stage of the production or distribution process these mergers aim to increase market share eliminate competition and achieve economies of scale on the other hand vertical mergers involve companies operating at different stages of the production or distribution chain they integrate either with suppliers backward integration or customers forward integration to streamline operations gain control over the value chain and potentially achieve cost savings and synergies 