IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v15y2015i1p15n15.html
   My bibliography  Save this article

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 37-51, January.
    • Handle: RePEc:bpj:bejeap:v:15:y:2015:i:1:p:15:n:15
    DOI: 10.1515/bejeap-2014-0077
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejeap-2014-0077
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejeap-2014-0077?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Reza Oladi & John Gilbert, 2011. "Monopolistic Competition and North–South Trade," Review of International Economics, Wiley Blackwell, vol. 19(3), pages 459-474, August.
    2. Farrell Joseph & Shapiro Carl, 2010. "Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-41, March.
    3. Jeffrey J Reuer & Oded Shenkar & Roberto Ragozzino, 2004. "Mitigating risk in international mergers and acquisitions: the role of contingent payouts," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(1), pages 19-32, January.
    4. Chau, Nancy H & Khan, M Ali, 2001. "Optimal Urban Employment Policies: Notes on Calvo and Quibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 557-568, May.
    5. Ali Khan, M., 1976. "Oligopoly in markets with a continuum of traders: An asymptotic interpretation," Journal of Economic Theory, Elsevier, vol. 12(2), pages 273-297, April.
    6. Batra, Raveendra N., 1972. "Monopoly theory in general equilibrium and the two-sector model of economic growth," Journal of Economic Theory, Elsevier, vol. 4(3), pages 355-371, June.
    7. Batra, Raveendra N., 1974. "Resource allocation in a general equilibrium model of production under uncertainty," Journal of Economic Theory, Elsevier, vol. 8(1), pages 50-63, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. Aaheli Ahmed & Sugata Marjit & Debashis Chakraborty, 2025. "Tariff, Wages and Compensation: A General Oligopolistic Equilibrium Analysis," CESifo Working Paper Series 11707, CESifo.
    3. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2015. "Cross-border Mergers and Privatization," Working Papers 0147eco, College of Business, University of Texas at San Antonio.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2015. "Cross-border Mergers and Privatization," Working Papers 0147eco, College of Business, University of Texas at San Antonio.
    2. Anthony Goerzen & Stephen Sapp & Andrew Delios, 2010. "Investor Response to Environmental Risk in Foreign Direct Investment," Management International Review, Springer, vol. 50(6), pages 683-708, December.
    3. Kristian D. Allee & Daniel D. Wangerin, 2018. "Auditor monitoring and verification in financial contracts: evidence from earnouts and SFAS 141(R)," Review of Accounting Studies, Springer, vol. 23(4), pages 1629-1664, December.
    4. Amitrajeet A. Batabyal & Hamid Beladi, 2019. "Preference matching, income, and population distribution in urban and adjacent rural regions," Papers in Regional Science, Wiley Blackwell, vol. 98(5), pages 2201-2208, October.
    5. Shawn W Ulrick & Mark D Williams, 2024. "“Multi-Product Critical Loss: Allowing for Varying Margins, Prices, and Quantities in the Candidate Antitrust Market”," Journal of Competition Law and Economics, Oxford University Press, vol. 20(1-2), pages 60-84.
    6. Ilya R. P. Cuypers & Youtha Cuypers & Xavier Martin, 2017. "When the target may know better: Effects of experience and information asymmetries on value from mergers and acquisitions," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 609-625, March.
    7. Friberg, Richard & Romahn, André, 2015. "Divestiture requirements as a tool for competition policy: A case from the Swedish beer market," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 1-18.
    8. Herbert Hovenkamp, 2011. "Harm to Competition Under the 2010 Horizontal Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 39(1), pages 3-18, August.
    9. Vardges Hovhannisyan, 2018. "A structural model of cost pass-through: the case of the US yogurt retailing," Empirical Economics, Springer, vol. 55(2), pages 805-830, September.
    10. Neurohr, Bertram, 2018. "A merger approach to cartel overcharge analysis," Economics Letters, Elsevier, vol. 168(C), pages 28-30.
    11. Fan, Cuihong & Jun, Byoung Heon & Wolfstetter, Elmar G., 2018. "Optimal licensing of technology in the face of (asymmetric) competition," International Journal of Industrial Organization, Elsevier, vol. 60(C), pages 32-53.
    12. Kadner-Graziano, Alessandro S., 2023. "Mergers of Complements: On the Absence of Consumer Benefits," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    13. Christopher Conlon & Julie Holland Mortimer, 2021. "Empirical properties of diversion ratios," RAND Journal of Economics, RAND Corporation, vol. 52(4), pages 693-726, December.
    14. Kyeong Hun Lee, 2018. "Cross‐border mergers and acquisitions amid political uncertainty: A bargaining perspective," Strategic Management Journal, Wiley Blackwell, vol. 39(11), pages 2992-3005, November.
    15. Bougette, Patrice & Budzinski, Oliver & Marty, Frédéric, 2025. "Ex-ante versus Ex-post in competition law enforcement: Blurred boundaries and economic rationale," International Review of Law and Economics, Elsevier, vol. 82(C).
    16. Leonidas G Barbopoulos & Jo Danbolt & Dimitris Alexakis, 2018. "The role of earnout financing on the valuation effects of global diversification," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(5), pages 523-551, July.
    17. Oliver Budzinski & Annika Stöhr, 2019. "Competition policy reform in Europe and Germany – institutional change in the light of digitization," European Competition Journal, Taylor & Francis Journals, vol. 15(1), pages 15-54, January.
    18. Anderson, Robert M. & Duanmu, Haosui & Ghosh, Aniruddha & Khan, M. Ali, 2024. "On existence of Berk-Nash equilibria in misspecified Markov decision processes with infinite spaces," Journal of Economic Theory, Elsevier, vol. 217(C).
    19. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    20. Pauline Affeldt & Lapo Filistrucchi & Tobias J. Klein, 2013. "Upward Pricing Pressure in Two‐sided Markets," Economic Journal, Royal Economic Society, vol. 123(11), pages 505-523, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:15:y:2015:i:1:p:15:n:15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.