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Can a Merger Take Place among Symmetric Firms?

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  • Mahelet G. Fikru
  • Sajal Lahiri

Abstract

The literature on mergers and acquisitions shows that a merger among identical firms does not take place because it is not profitable. This study forms a theoretical framework for understanding mergers among identical firms in a pollution-intensive sector. When a merger occurs the market structure changes and so do optimal environmental policies. This flexibility in policy provides the incentive to merge even if there are no efficiency gains.

Suggested Citation

  • Mahelet G. Fikru & Sajal Lahiri, 2013. "Can a Merger Take Place among Symmetric Firms?," Studies in Microeconomics, , vol. 1(2), pages 155-162, December.
    • Handle: RePEc:sae:miceco:v:1:y:2013:i:2:p:155-162
    DOI: 10.1177/2321022213501255
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    References listed on IDEAS

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    Cited by:

    1. Fikru, Mahelet G. & Gautier, Luis, 2016. "Mergers in Cournot markets with environmental externality and product differentiation," Resource and Energy Economics, Elsevier, vol. 45(C), pages 65-79.
    2. Mamada, Robert & Perrings, Charles, 2020. "The effect of emission charges on output and emissions in dynamic Cournot duopoly," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 370-380.
    3. Fikru, Mahelet G., 2016. "Modelling mergers among polluting firms when environmental policy is endogenous," Economic Analysis and Policy, Elsevier, vol. 49(C), pages 1-6.

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