Mergers, Investment Decisions and Internal Organisation

Albert Banal-Estanol, Ines Macho-Stadler and Jo Seldeslachts

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We analyse the effects of investment decisions and firms' internal organisation on the efficiency and stability of horizontal mergers. In our framework economies of scale are endogenous and there might be internal conflict within merged firms. We show that often stable mergers do not lead to more efficiency and may even lead to efficiency losses. These mergers lead to lower total welfare, suggesting that a regulator should be careful in assuming that possible efficiency gains of a merger will be effiectively realised. Moreover, the paper offers a possible explanation for merger failures.

Keywords: Horizontal Mergers; Investment; Efficiency gains; Internal Conflict. (search for similar items in EconPapers)
JEL-codes: D43 L22 (search for similar items in EconPapers)
Pages: 36
Date: 2003-04-23
New Economics Papers: this item is included in nep-com, nep-fin and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Mergers, Investment Decisions and Internal Organisation (2015)
Working Paper: Mergers, Investment Decisions and Internal Organisation (2004)
Working Paper: Mergers, Investment Decisions and Internal Organisation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:569.03

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