Cross-border Merger, Vertical Structure, and Spatial Competition
AbstractThis analysis is a natural follow up of continued efforts to assess the consequences of cross-border mergers in industries with a vertical structure. Absent free trade, in a vertically related industry, the downstream firms will not choose the social optimum under spatial price discrimination when none of the downstream firms produce all the varieties that consumers demand. We show that free trade will induce the downstream firms to gravitate toward the social optimum but an upstream merger across borders, under free trade, will pull the downstream firms away from the social optimum back to their autarkic positions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24474.
Date of creation: 2010
Date of revision:
Product-differentiation; Price-discrimination; Spatialcompetition; Firm-location; Cross-border Merger;
Other versions of this item:
- Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Cross-border merger, vertical structure, and spatial competition," Economics Letters, Elsevier, vol. 109(2), pages 112-114, November.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- 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-2010-08-28 (All new papers)
- NEP-COM-2010-08-28 (Industrial Competition)
- NEP-IND-2010-08-28 (Industrial Organization)
- NEP-MKT-2010-08-28 (Marketing)
- NEP-REG-2010-08-28 (Regulation)
- NEP-URE-2010-08-28 (Urban & Real Estate Economics)
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