On Cross-Border Mergers and Product Differentiation

Hamid Beladi, Avik Chakrabarti () and Sugata Marjit

The B.E. Journal of Economic Analysis & Policy, 2015, vol. 15, issue 1, 37-51

Abstract: We construct a general equilibrium model of an oligopolistic industry that allows us to capture the role of product differentiation in the incentives for and implications of cross-border mergers. We show that a rise in the degree of product differentiation will compress the extensive margins of trade and, at the same time, reduce the gains from cross-border mergers. We also demonstrate how cross-border mergers can mitigate the effect of product differentiation on the extensive margins of trade.

Keywords: general equilibrium; cross-border merger; international trade; oligopoly; GOLE; product differentiation; comparative advantage (search for similar items in EconPapers)
JEL-codes: F10 F12 F33 L13 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/bejeap-2014-0077

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