Mergers, Investment Decisions and Internal Organisation

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

No 944, CESifo Working Paper Series from CESifo

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 e.ciency 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: horizontal mergers; investment; efficiency gains; internal conflict (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (1)

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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:ces:ceswps:_944

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