Evaluating the Merger and its Remedies in a Dynamic Environment: Revisiting the 1970 Yawata-Fuji steel merger (Japanese)
Hiroshi Ohashi (),
Tsuyoshi Nakamura and
Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)
This paper estimates a dynamic oligopoly model to assess the economic consequences of a horizontal merger that took place between Yawata Steel and Fuji Steel in 1970 to create the second largest global producer of steel. The paper solves a Markov perfect Nash equilibrium for the model and simulates the welfare effects of the horizontal merger. Estimates reveal that the merger enhanced the production efficiency of the merging party by a magnitude of 4.1 %, while the exercise of market power was restrained primarily by the presence of fringe competitors. Our simulation result also indicates that structural remedies endorsed by the competition authority failed to promote competition.
Pages: 56 pages
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Persistent link: https://EconPapers.repec.org/RePEc:eti:rdpsjp:10021
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