The international drivers of domestic airline mergers in twenty nations: integrating industrial organization and international business

Joseph Clougherty

Managerial and Decision Economics, 2006, vol. 27, issue 1, 75-93

Abstract: The domestic airline merger phenomenon of the late 1980s and early 1990s sparked a great deal of Industrial Organization (IO) literature; yet, that literature neglected non-US domestic mergers and potential for international competitive gains. Using an International Business perspective to complement an IO analysis, I argue that factoring international competitive incentives helps explain domestic airline merger activity. A Cournot model of airline competition illustrates that domestic mergers, via enhanced domestic networks and reduced domestic competition, generate international competitive gains. Further, empirical tests-using a structural equations approach on panel data covering interhyphen-national city-pair market segments-support domestic mergers improving international competitiveness. Copyright © 2006 John Wiley & Sons, Ltd.

Date: 2006
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Working Paper: The International Drivers of Domestic Airline Mergers in Twenty Nations: Integrating Industrial Organization and International Business (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:27:y:2006:i:1:p:75-93

DOI: 10.1002/mde.1248

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