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Merger policy in innovative industries

Author

Listed:
  • Miguel González-Maestre

    () (Universidad de Murcia)

  • Lluís M. Granero

    () (Universitat de València)

Abstract

Abstract We analyze optimal merger policy in R&D-intensive industries with product innovation aiming to improve the quality of products. Our results suggest that a permissive merger policy is rarely optimal in high-tech industries when the antitrust authority considers a welfare standard that balances the impact of mergers on consumers’ surplus and firms’ profits. In particular, relative to a benchmark where the effects from R&D are absent, we show that the optimal merger policy should not be substantially more permissive in the presence of those effects from R&D.

Suggested Citation

  • Miguel González-Maestre & Lluís M. Granero, 2016. "Merger policy in innovative industries," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 15(3), pages 131-147, December.
  • Handle: RePEc:spr:portec:v:15:y:2016:i:3:d:10.1007_s10258-016-0122-9
    DOI: 10.1007/s10258-016-0122-9
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    References listed on IDEAS

    as
    1. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 701-728.
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    More about this item

    Keywords

    Merger policy; High-tech industries; Endogenous quality; Oligopoly;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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