EconPapers    
Economics at your fingertips  
 

Horizontal merger under strategic tax policy

Chih-Chen Liu, Arijit Mukherjee and Leonard F.S. Wang

Economics Letters, 2015, vol. 136, issue C, 184-186

Abstract: In a Cournot oligopoly with consumption externality, we show that the presence of a strategic tax policy increases the incentive for a horizontal merger compared to the situation with no tax policy. Thus, we point towards a new factor, viz., strategic tax policy, for increasing the incentive for a horizontal merger that has been ignored in the existing literature. In contrast to the usual belief, we also show that a horizontal merger may benefit the consumers and increase social welfare.

Keywords: Merger; Tax policy; Social welfare (search for similar items in EconPapers)
JEL-codes: D43 L13 L51 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176515003900
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Horizontal Merger under Strategic Tax Policy (2014) Downloads
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: https://EconPapers.repec.org/RePEc:eee:ecolet:v:136:y:2015:i:c:p:184-186

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-11
Handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:184-186