The Impact of Firm Size and Market Size Asymmetries on National Mergers in a Three-Country Model

Luis Santos-Pinto ()

Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP

Abstract: This paper studies the impact of firm and market size asymmetries on merger decisions. To do that I consider a model where a small and a large country compete in a third (world) market. Each of the two countries has two firms (with potentially different costs) that supply the domestic market and export to the third market. Merger decisions in the two countries are modeled as a simultaneously move game. The paper finds that firms in the large country have more incentives to merge than firms in the small country. In contrast, the government of the large country has more incentives to block a merger than the government of the small country. Thus, the model predicts that conflicts of interest between governments and firms concerning national mergers are more likely in large countries than in small ones.

Keywords: mergers; international trade; merger policy; size asymmetry (search for similar items in EconPapers)
JEL-codes: F13 H77 L11 L41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2009-02
View list of references

Downloads: (external link)
http://www.hec.unil.ch/deep/textes/09.06.pdf (application/pdf)

Related works:
Working Paper: The Impact of Firm Size and Market Size Asymmetries on National Mergers in a Three-Country Model (2009)
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:lau:crdeep:09.06

Access Statistics for this paper

More papers in Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP
Address: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne
Series data maintained by Claudine Delapierre Saudan ().