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Cross-border mergers in a mixed oligopoly

  • Heywood, John S.
  • McGinty, Matthew

This paper identifies the unique strategic issues of cross-border mergers in a mixed oligopoly showing that the presence of a welfare maximizing public firm increases the incentive for such mergers. The well-known merger paradox that two-firm mergers are rarely profitable is substantially relaxed in the cases of both linear and convex production costs. The ability to identify profitable two-firm mergers in this context takes on added importance as the recent cross-border merger wave often involved industries with public firms.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 1-2 (January)
Pages: 382-389

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:1-2:p:382-389
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  1. Artz, Benjamin & Heywood, John S. & McGinty, Matthew, 2009. "The merger paradox in a mixed oligopoly," Research in Economics, Elsevier, vol. 63(1), pages 1-10, March.
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