Endogenous Merger Waves in Vertically Related Industries
AbstractWe study merger waves in vertically related industries where firms can engage in both vertical and horizontal mergers. Even though any individual merger would have been profitable, firms may refrain from merging for fear of negative impacts from other mergers. When they do merge, however, they always merge in waves, which is either vertical or horizontal depending on the relative intensity of double markup and horizontal competitions in the two industries. Finally, merger waves may happen with or without any fundamental change in the underlying economic conditions.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 11-34.
Length: 24 pages
Date of creation: Oct 2011
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merger wave; horizontal mergers; vertical mergers; stable market structure;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-07 (All new papers)
- NEP-BEC-2011-11-07 (Business Economics)
- NEP-COM-2011-11-07 (Industrial Competition)
- NEP-HME-2011-11-07 (Heterodox Microeconomics)
- NEP-IND-2011-11-07 (Industrial Organization)
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