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Merger Policy to Promote Global Players? A Simple Model

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Listed author(s):
  • Haufler, Andreas
  • Nielsen, Søren Bo

Abstract

We use a simple framework where firms in two countries serve their respective domestic markets and a world market to analyze under which conditions cost-reducing mergers will be beneficial for the merging firms, the home country, and the world as a whole. For a national merger, the policies enacted by a national merger authority tend to be overly restrictive from a global efficiency perspective. In contrast, all international mergers that benefit the merging firms will be cleared by either a national or a regional regulator, and this laissez-faire approach is also globally efficient. Finally, we derive the properties of the endogenous merger equilibrium.

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File URL: https://epub.ub.uni-muenchen.de/666/1/Haufler_666.pdf
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Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 666.

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Date of creation: Jul 2005
Handle: RePEc:lmu:muenec:666
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Keywords: merger policy; international trade;

Other versions of this item:

Find related papers by JEL classification:
  • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
  • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
  • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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  1. Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2006. "Efficiency Gains from Mergers," Chapters,in: European Merger Control, chapter 3 Edward Elgar Publishing.
  2. repec:hhs:iuiwop:543 is not listed on IDEAS
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  9. Joseph A. Clougherty, 2003. "Industry Trade-Balance and Domestic Merger Policy: Some Empirical Evidence from the U.S," CIG Working Papers SP II 2003-19, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
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  18. Keith Head & John Ries, 1997. "International Mergers and Welfare under Decentralized Competition Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1104-1123, November.
  19. Lommerud, Kjell Erik & Sorgard, Lars, 1997. "Merger and product range rivalry," International Journal of Industrial Organization, Elsevier, vol. 16(1), pages 21-42, November.
  20. Huck, S. & Konrad, K.A. & Müller, W., 2005. "Merger Without Costs Advantage," Discussion Paper 2005-019, Tilburg University, Tilburg Law and Economic Center.
  21. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
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