Globalisation is good for you: Distributional effects of mergers caused by globalisation
AbstractGlobalisation (in the sense of increased international trade) is usually associated with gains from trade but also distributional effects where e.g. capital owners gain and workers lose, both in real terms. In recent years, globalisation seems to be synonymous to international mergers of firms. This paper shows in a model with Cournot competition that international mergers due to globalisation also imply gains from trade. Under plausible assumptions for capital intensities and in contrast to the usual results, however, both capital owners and workers gain in real terms. This effect is due to the reduction in the consumption good price caused by an increase in competition. --
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Bibliographic InfoPaper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 07/01.
Date of creation: 2001
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