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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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; Fragmentation
- 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)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- J. Riley & E. Maskin, 1981.
"Optimal Auctions with Risk Averse Buyers,"
311, Massachusetts Institute of Technology (MIT), Department of Economics.
- Braid, Ralph M., 2008. "Spatial price discrimination and the locations of firms with different product selections or product varieties," Economics Letters, Elsevier, vol. 98(3), pages 342-347, March.
- Leandro Arozamena & erico Weinschelbaum, 2008.
"Simultaneous vs. Sequential Price Competition with Incomplete Information,"
Department of Economics Working Papers
2008_3, Universidad Torcuato Di Tella.
- Arozamena, Leandro & Weinschelbaum, Federico, 2009. "Simultaneous vs. sequential price competition with incomplete information," Economics Letters, Elsevier, vol. 104(1), pages 23-26, July.
- Klomp, Jeroen, 2010. "Causes of banking crises revisited," The North American Journal of Economics and Finance, Elsevier, vol. 21(1), pages 72-87, March.
- Raff, Horst & Ryan, Michael & Stähler, Frank, 2009.
"The choice of market entry mode: Greenfield investment, M&A and joint venture,"
International Review of Economics & Finance,
Elsevier, vol. 18(1), pages 3-10, January.
- Stähler, Frank & Ryan, Michael & Raff, Horst, 2007. "The Choice of Market Entry Mode: Greenfield Investment, M&A and Joint Venture," Economics Working Papers 2007,19, Christian-Albrechts-University of Kiel, Department of Economics.
- Neary, J. Peter, 2004.
"Cross-Border Mergers as Instruments of Comparative Advantage,"
Center for European, Governance and Economic Development Research Discussion Papers
34, University of Goettingen, Department of Economics.
- J. Peter Neary, 2007. "Cross-Border Mergers as Instruments of Comparative Advantage," Review of Economic Studies, Oxford University Press, vol. 74(4), pages 1229-1257.
- Neary, J Peter, 2004. "Cross-Border Mergers as Instruments of Comparative Advantage," CEPR Discussion Papers 4325, C.E.P.R. Discussion Papers.
- J Peter Neary, 2004. "Cross-Border Mergers as Instruments of Comparative Advantage," Working Papers 200404, School Of Economics, University College Dublin.
- Lafontaine, Francine & Slade, Margaret, 2007.
"Vertical Integration and Firm Boundaries : The Evidence,"
The Warwick Economics Research Paper Series (TWERPS)
799, University of Warwick, Department of Economics.
- Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
- Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2009.
"Sequential Spatial Competition in Vertically Related industries with Different Product Varieties,"
19278, University Library of Munich, Germany.
- Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Sequential spatial competition in vertically related industries with different product varieties," Economics Letters, Elsevier, vol. 106(2), pages 112-114, February.
- Haller, Stefanie A., 2009. "The impact of multinational entry on domestic market structure and investment," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 52-62, January.
- Amador, João & Cabral, Sónia, 2008.
"Vertical specialization across the world: a relative measure,"
9618, University Library of Munich, Germany.
- Amador, João & Cabral, Sónia, 2009. "Vertical specialization across the world: A relative measure," The North American Journal of Economics and Finance, Elsevier, vol. 20(3), pages 267-280, December.
- João Amador & Sónia Cabral, 2008. "Vertical Specialization Across the World: A Relative Measure," Working Papers w200810, Banco de Portugal, Economics and Research Department.
- Kurata, Hiroshi & Ohkawa, Takao & Okamura, Makoto, 2009. "Location choice, competition, and welfare in non-tradable service FDI," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 20-25, January.
- Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 27-41, January.
- Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2008. "Vertical mergers and downstream spatial competition with different product varieties," Economics Letters, Elsevier, vol. 101(3), pages 262-264, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.