Vertical or Horizontal: Endogenous Merger Waves in Vertically Related Industries

Zhiyong Yao () and Zhou Wen ()
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Zhou Wen: Faculty of Business and Economics, The University of Hong Kong, Pokfulam Road, Hong Kong, China

The B.E. Journal of Economic Analysis & Policy, 2015, vol. 15, issue 3, 1237-1262

Abstract: Endogenous merger waves are studied in vertically related industries where firms may engage in both vertical and horizontal mergers. It is shown that whether and how firms merge depends crucially on the balance between vertical and horizontal externalities, and the balance between upstream and downstream competition. Furthermore, firms may merge with or without any fundamental change in the underlying economic conditions.

Keywords: merger waves; endogenous mergers; vertical mergers; horizontal mergers; stable market structure (search for similar items in EconPapers)
JEL-codes: D4 L1 L2 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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DOI: 10.1515/bejeap-2014-0165

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