Access regulation and cross-border mergers: Is international coordination beneficial?

Kjell Lommerud (), Trond Olsen and Odd Rune Straume

No 13/05, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: The international integration of regulated markets poses new challenges for regulatory policy. One question is the implications that the overall international regulatory regime will have for cross-border and/or domestic merger activity. In particular, do non-coordinated policies stimulate cross-border mergers that are overall inefficient, and is this then an argument for international coordination of such policies? The paper addresses this issue in a setting where firms must have access to a transportation network which is controlled by national regulators. The analysis reveals that while non-coordinated regulatory policies may induce cross-border mergers (by allowing the firms in question to play national regulators out against each other), this can nevertheless be overall welfare enhancing compared to market outcomes under coordinated regulation.

Keywords: Access regulation; Endogenous merger; Policy coordination (search for similar items in EconPapers)
JEL-codes: L13 L41 L50 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2005-04-05
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Citations: View citations in EconPapers (1)

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Working Paper: Access regulation and cross-border mergers: Is international coordination beneficial? (2005)
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