The search for trading partners and the cross-border merger decision

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The search for trading partners and the cross-border merger decision

Author Info

T.Huw Edwards () (Dept of Economics, Loughborough University)
Ben Ferrett () (Dept of Economics, Loughborough University)

Additional information is available for the following registered author(s):

Terence Huw Edwards

Abstract

We investigate the merger decision between two firms in an outsourcing relationship, one upstream and the other downstream. The inter-firm relationship is subject both to ex ante matching uncertainty and to contractual efficiency issues. Cross-border merger is assumed to solve the latter problem, but at the expense of curtailing the match-searching process. The trade-off between these two factors is assumed to determine the dynamics of foreign direct investment in this kind of industry.

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Publisher Info
Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2009_15.

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Date of creation: Oct 2009
Date of revision: Oct 2009
Handle: RePEc:lbo:lbowps:2009_15

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Related research
Keywords: Trade; search; outsourcing; merger.;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-10-24 (All new papers)
NEP-COM-2009-10-24 (Industrial Competition)
NEP-IND-2009-10-24 (Industrial Organization)

References listed on IDEAS
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This page was last updated on 2009-11-26.

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