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Mergers between Asymmetric Firms: Profitability and Welfare

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  • Fauli-Oller, Ramon

Abstract

Using only information on the degree of concavity of demand and observable structural variables such as the market shares of firms, a necessary and sufficient condition for a merger to increase welfare is derived. On the profitability side, we obtain that when market size decreases merger profitability increases. Copyright 2002 by Blackwell Publishers Ltd and The Victoria University of Manchester

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  • Fauli-Oller, Ramon, 2002. "Mergers between Asymmetric Firms: Profitability and Welfare," Manchester School, University of Manchester, vol. 70(1), pages 77-87, January.
  • Handle: RePEc:bla:manchs:v:70:y:2002:i:1:p:77-87
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    Cited by:

    1. Mahelet G. Fikru, 2013. "Environmental Policies, Mergers and Welfare," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 449-461, July-Dece.
    2. Oliver Budzinski & Jürgen-Peter Kretschmer, 2009. "Implications of Unprofitable Horizontal Mergers: A Positive External Effect does not Suffice to Clear a Merger!," Working Papers 84/09, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    3. Canton, Joan & David, Maia & Sinclair-Desgagné, Bernard, 2012. "Environmental Regulation and Horizontal Mergers in the Eco-industry," Strategic Behavior and the Environment, now publishers, vol. 2(2), pages 107-132, July.
    4. Gamal Atallah, 2005. "Partner Selection in R&D Cooperation," CIRANO Working Papers 2005s-24, CIRANO.
    5. Kao, Tina & Menezes, Flavio, 2009. "Endogenous mergers under multi-market competition," Journal of Mathematical Economics, Elsevier, vol. 45(12), pages 817-829, December.
    6. Ramon Fauli-Oller & Borja Mesa-Sánchez, 2015. "Losses from Horizontal Merger: an Extension to a Successive Oligopoly Model with Product Differentiation," Manchester School, University of Manchester, vol. 83(5), pages 604-621, September.
    7. Fikru, Mahelet G. & Gautier, Luis, 2016. "Mergers in Cournot markets with environmental externality and product differentiation," Resource and Energy Economics, Elsevier, vol. 45(C), pages 65-79.
    8. Mahelet G. Fikru & Matt Insall, 2016. "Is it more profitable to acquire cleaner or dirtier firms?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(4), pages 443-457, October.
    9. Oliver Budzinski & Jürgen-Peter Kretschmer, 2007. "Implications of Unprofitable Horizontal Mergers: A Re-Interpretation of the Farrell-Shapiro-Framework," Marburg Working Papers on Economics 200714, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    10. Fikru, Mahelet G. & Lahiri, Sajal, 2014. "Cross-border mergers with flexible policy regime: The role of efficiency and market size," Journal of the Japanese and International Economies, Elsevier, vol. 34(C), pages 58-70.
    11. José Méndez Naya, 2007. "Privatización y fusiones en oligopolios mixtos," Estudios de Economia, University of Chile, Department of Economics, vol. 34(1 Year 20), pages 37-52, June.
    12. Neubecker, Leslie & Stadler, Manfred, 2003. "Endogenous merger formation in asymmetric markets: A reformulation and welfare analysis," Tübinger Diskussionsbeiträge 257, University of Tübingen, School of Business and Economics.
    13. John S. Heywood & Matthew Mcginty, 2007. "Convex Costs And The Merger Paradox Revisited," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 342-349, April.
    14. Fikru, Mahelet G., 2016. "Modelling mergers among polluting firms when environmental policy is endogenous," Economic Analysis and Policy, Elsevier, vol. 49(C), pages 1-6.

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