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Authors
Advisor(s)
Abstract(s)
This paper proposes a sequential merger formation game to study how trade policy can influence firms'
choice between intra-national and cross-border mergers in an international Cournot oligopoly with a cost
structure à la Perry and Porter [Perry, M. and Porter, R.H., 1985. Oligopoly and the Incentive for Horizontal
Merger. American Economic Review 75(1), 219–227.].We find that the equilibrium market structure depends
heavily on: (i) the level of trade costs; and (ii) whether or not active antitrust authorities are incorporated
within the sequential merger game. In addition, it is shown that whenever mergers occur in equilibrium,
they occur in waves and the merger wave comprises at least one cross-border merger.
Description
Keywords
Endogenous mergers Merger policy Tariff-jumping FDI Endogenous split of surplus
Pedagogical Context
Citation
FUMAGALLI, Eileen; VASCONCELOS, Hélder - Sequential cross-border mergers. International Journal of Industrial Organization. ISSN 0167-7187.Vol. 27 (2009), p.175–187
Publisher
Elsevier