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

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Author Info

  • T.Huw Edwards

    ()
    (Dept of Economics, Loughborough University)

  • Ben Ferrett

    ()
    (Dept of Economics, Loughborough University)

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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File URL: http://www.lboro.ac.uk/departments/sbe/RePEc/lbo/lbowps/templateedandfer_wp.pdf
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Bibliographic 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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Postal: Loughborough, Leicestershire, LE11 3TU
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Fax: +44 (0) 1509 223910
Web page: http://www.lboro.ac.uk/departments/sbe/research/economics/index.html
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Keywords: Trade; search; outsourcing; merger.;

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