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On Cross-Border Mergers and Product Differentiation

Author

Listed:
  • Beladi Hamid

    (Department of Economics, College of Business, University of Texas at San Antonio, One UTSA Circle, San Antonio, TX 78249-–0633, USA)

  • Chakrabarti Avik

    (Department of Economics, University of Wisconsin-Milwaukee, Milwaukee, WI 53201-0413, USA)

  • Marjit Sugata

    (Centre for Studies in Social Sciences (CSSSC), R-1 Baishnabghata-Patuli Township, Kolkata 700094, West Bengal, India)

Abstract

We construct a general equilibrium model of an oligopolistic industry that allows us to capture the role of product differentiation in the incentives for and implications of cross-border mergers. We show that a rise in the degree of product differentiation will compress the extensive margins of trade and, at the same time, reduce the gains from cross-border mergers. We also demonstrate how cross-border mergers can mitigate the effect of product differentiation on the extensive margins of trade.

Suggested Citation

  • Beladi Hamid & Chakrabarti Avik & Marjit Sugata, 2015. "On Cross-Border Mergers and Product Differentiation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(1), pages 1-15, January.
    • Handle: RePEc:bpj:bejeap:v:15:y:2015:i:1:p:15:n:15
    DOI: 10.1515/bejeap-2014-0077
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    References listed on IDEAS

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    Cited by:

    1. Beladi, Hamid & Chakrabarti, Avik, 2019. "Multidivisional firms, internal competition, and comparative advantage: Baye et al. Meet Neary," Journal of International Economics, Elsevier, vol. 116(C), pages 50-57.
    2. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2015. "Cross-border Mergers and Privatization," Working Papers 0147eco, College of Business, University of Texas at San Antonio.

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