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National Versus International Mergers in Unionized Oligopoly

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Author Info
Kjell Erik Lommerud () (University of Bergen)
Odd Rune Straume () (University of Bergen)
Lars Sorgard () (Norwegian Competition Authority)

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Abstract

We analyze how the presence of trade unions affects the pattern of mergers in an international oligopoly and the welfare implications thereof. We find that wages for the merger participants are always lower when they merge internationally, rather than nationally. Using a model of endogenous merger formation, we find that the firms will merge internationally in equilibrium. There are more international mergers than socially preferred, unless products are close substitutes. A "national champion" policy of promoting domestic mergers rather than international ones is nevertheless never optimal. Ordering information: This article can be ordered from http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi?action=view&year=2006&issue=spr&page=212.

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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 37 (2006)
Issue (Month): 1 (Spring)
Pages: 212-233
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Handle: RePEc:rje:randje:v:37:y:2006:1:p:212-233

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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