Sequential cross-border mergers

Eileen Fumagalli and Helder Vasconcelos ()

International Journal of Industrial Organization, 2009, vol. 27, issue 2, pages 175-187

Abstract: This paper proposes a sequential merger formation game to study how trade policy can influence firms' choice between intra-national and cross-border mergers in an international Cournot oligopoly with a cost structure à la Perry and Porter [Perry, M. and Porter, R.H., 1985. Oligopoly and the Incentive for Horizontal Merger. American Economic Review 75(1), 219-227.]. We find that the equilibrium market structure depends heavily on: (i) the level of trade costs; and (ii) whether or not active antitrust authorities are incorporated within the sequential merger game. In addition, it is shown that whenever mergers occur in equilibrium, they occur in waves and the merger wave comprises at least one cross-border merger.

Keywords: Endogenous; mergers; Merger; policy; Tariff-jumping; FDI; Endogenous; split; of; surplus (search for similar items in EconPapers)
Date: 2009
View citations in EconPapers

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V8P ... b82056ff33d60f46b52d
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:2:p:175-187

Access Statistics for this article

International Journal of Industrial Organization is edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Series data maintained by Heidi Boesdal ().