In-Market vs. Cross-Border Merging: The Impact of Merger Policy
In this paper, we study how merger policy affects the choice between domestic and cross-border merger. We build a model where a firm chooses between these two types of mergers. While a domestic merger will be refused if it is anticompetitive, a cross-border merger has an uncertain ex-post profitabil...
محفوظ في:
| الحاوية / القاعدة: | URI:https://journals.openedition.org/rei, |
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| المؤلف الرئيسي: | |
| التنسيق: | Article ou chapitre numérique |
| اللغة: | Anglais |
| منشور في: |
Revue d’économie industrielle
2019
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| الموضوعات: | |
| الوصول للمادة أونلاين: | Accès Université d'Orléans et IFPM Accès Université d'Orléans et IFPM |
| الملخص: | In this paper, we study how merger policy affects the choice between domestic and cross-border merger. We build a model where a firm chooses between these two types of mergers. While a domestic merger will be refused if it is anticompetitive, a cross-border merger has an uncertain ex-post profitability. We first study this tradeoff in a scenario where, after a non-profitable cross-border merger, exiting the foreign market through another merger is not possible. In this case, a more lenient merger policy discourages cross-border mergers relative to domestic mergers. However, if it is possible to exit through a domestic merger, this tradeoff is altered, as a more lenient merger policy lowers barriers to exit, thereby increasing the profitability of a cross-border merger.JEL classification: L22, L40, D21, G34. |
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