Mergers, Investment Decisions and Internal Organisation

Jo Seldeslachts, Ines Macho-Stadler and Albert Banal-Estañol
Authors registered in the RePEc Author Service: Albert Banal-Estanol

No 111, Working Papers from Barcelona School of Economics

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 effectively realised. Moreover, the paper offers a possible explanation for merger failures.

Keywords: investments; horizontal mergers; efficiency gains; internal conflict (search for similar items in EconPapers)
JEL-codes: D43 L22 (search for similar items in EconPapers)
Date: 2015-09
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Related works:
Working Paper: Mergers, Investment Decisions and Internal Organisation (2004)
Working Paper: Mergers, Investment Decisions and Internal Organisation (2003)
Working Paper: Mergers, Investment Decisions and Internal Organisation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:111

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