The Equilibrium Ownership of an International Oligopoly

Henrik Horn and Lars Persson

No 2302, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Mergers and acquisitions (M&A) is the dominant form of Foreign Direct Investment (FDI), but has received only scarce attention in the theory literature on trade and investment. This paper highlights how the international pattern of ownership of productive assets may depend on features of trade and production costs. It suggests how high trade costs may be conducive to national ownership of assets, while international firms may arise at lower trade costs, contrary to what the 'tariff jumping' argument would suggest. It also shows how private and social incentives for M&A may differ for weak merger synergies, but converge when synergies are stronger.

Keywords: Endogenous Market Structure; International Mergers; Tariff Jumping FDI (search for similar items in EconPapers)
JEL-codes: F23 L13 (search for similar items in EconPapers)
Date: 1999-11
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Citations: View citations in EconPapers (22)

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Related works:
Journal Article: The equilibrium ownership of an international oligopoly (2001)
Working Paper: The Equilibrium Ownership of an International Oligopoly (1999)
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