The international drivers of domestic airline mergers in twenty nations: integrating industrial organization and international business
The domestic airline merger phenomenon of the late 1980s and early 1990s sparked a great deal of Industrial Organization (IO) literature; yet, that literature neglected non-US domestic mergers and potential for international competitive gains. Using an International Business perspective to complement an IO analysis, I argue that factoring international competitive incentives helps explain domestic airline merger activity. A Cournot model of airline competition illustrates that domestic mergers, via enhanced domestic networks and reduced domestic competition, generate international competitive gains. Further, empirical tests-using a structural equations approach on panel data covering interhyphen-national city-pair market segments-support domestic mergers improving international competitiveness. Copyright © 2006 John Wiley & Sons, Ltd.
Volume (Year): 27 (2006)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Windle, Robert J. & Dresner, Martin E., 1992. "Partial productivity measures and total factor productivity in the air transport industry: Limitations and uses," Transportation Research Part A: Policy and Practice, Elsevier, vol. 26(6), pages 435-445, November.
- Jan K. Brueckner, 2003. "International Airfares in the Age of Alliances: The Effects of Codesharing and Antitrust Immunity," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 105-118, February.
- Brander, James A. & Zhang, Anming, 1993. "Dynamic oligopoly behaviour in the airline industry," International Journal of Industrial Organization, Elsevier, vol. 11(3), pages 407-435, September.
- Kim, E Han & Singal, Vijay, 1993. "Mergers and Market Power: Evidence from the Airline Industry," American Economic Review, American Economic Association, vol. 83(3), pages 549-569, June.
- James A. Brander & Barbara J. Spencer, 1981.
"Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 14(3), pages 371-389, August.
- James A. Brander & Barbara J. Spencer, 1980. "Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry," Working Papers 414, Queen's University, Department of Economics.
- Clougherty, Joseph A., 2002. "US domestic airline mergers: the neglected international determinants," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 557-576, April.
- Brueckner, Jan K & Whalen, W Tom, 2000. "The Price Effects of International Airline Alliances," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 503-545, October.
- Brueckner, Jan K. & Spiller, Pablo T., 1991. "Competition and mergers in airline networks," International Journal of Industrial Organization, Elsevier, vol. 9(3), pages 323-342, September.
- Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, number 9780521805001.
- Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, number 9780521800952, February.
- Morrison, Steven A & Winston, Clifford, 1987. "Empirical Implications and Tests of the Contestability Hypothesis," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 53-66, April.
- Brueckner, Jan K & Spiller, Pablo T, 1994. "Economies of Traffic Density in the Deregulated Airline Industry," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 379-415, October.
- Cason, Timothy N., 1994. "The strategic value of asymmetric information access for cournot competitors," Information Economics and Policy, Elsevier, vol. 6(1), pages 3-24, March.
- Cason, T.N., 1992. "The Strategic Value of Asymmetric Information Access for Cournot Competitors," Papers 9304, Southern California - Department of Economics.
- Joseph A Clougherty, 2001. "Globalization and the Autonomy of Domestic Competition Policy: An Empirical Test on the World Airline Industry," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 459-478, September.
- Panzar, John C & Willig, Robert D, 1981. "Economies of Scope," American Economic Review, American Economic Association, vol. 71(2), pages 268-272, May. Full references (including those not matched with items on IDEAS)