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To acquire, or to compete? An entry dilemma

  • Jean Gabszewicz

    ()

  • Didier Laussel

    ()

    (Université de la Méditerrannée; chateau La Farge, Les Milles (France))

  • Ornella Tarola

    ()

    (Department of Economic Theory - Sapienza University of Rome (Italy))

In this paper we address the following question : is it more profitable, for an entrant in a differentiated market, to acquire an existing firm than to compete? We illustrate the answer by considering competition in the banking sector.

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File URL: http://www.diss.uniroma1.it/sites/default/files/allegati/wp-04-10-banking_JICT_wpdte_2.pdf
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Paper provided by Sapienza University of Rome, DISS in its series Working Papers with number 4/10.

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Date of creation: Jan 2010
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Handle: RePEc:saq:wpaper:4/10
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  1. Smith, Michael D & Brynjolfsson, Erik, 2001. "Consumer Decision-Making at an Internet Shopbot: Brand Still Matters," Journal of Industrial Economics, Wiley Blackwell, vol. 49(4), pages 541-58, December.
  2. Kim, Moshe & Kliger, Doron & Vale, Bent, 2003. "Estimating switching costs: the case of banking," Journal of Financial Intermediation, Elsevier, vol. 12(1), pages 25-56, January.
  3. Gene M. Grossman & Carl Shapiro, 1986. "Foreign Counterfeiting of Status Goods," NBER Working Papers 1915, National Bureau of Economic Research, Inc.
  4. Horst Raff & Michael Ryan & Frank Stähler, 2006. "Asset Ownership and Foreign-Market Entry," CESifo Working Paper Series 1676, CESifo Group Munich.
  5. Pehr-Johan Norbäck & Lars Persson, 2008. "Cross-Border Mergers & Acquisitions Policy in Service Markets," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 269-293, December.
  6. Raff, Horst & Ryan, Michael & Stähler, Frank, 2009. "The choice of market entry mode: Greenfield investment, M&A and joint venture," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 3-10, January.
  7. Lynne Pepall & Dan Richards, 1999. "The Simple Economics of "Brand-Stretching"," Discussion Papers Series, Department of Economics, Tufts University 9905, Department of Economics, Tufts University.
  8. Nocke, Volker & Yeaple, Stephen, 2007. "Cross-border mergers and acquisitions vs. greenfield foreign direct investment: The role of firm heterogeneity," Journal of International Economics, Elsevier, vol. 72(2), pages 336-365, July.
  9. Eicher, Theo & Kang, Jong Woo, 2005. "Trade, foreign direct investment or acquisition: Optimal entry modes for multinationals," Journal of Development Economics, Elsevier, vol. 77(1), pages 207-228, June.
  10. Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March.
  11. Vale, Bent, 1993. " The Dual Role of Demand Deposits under Asymmetric Information," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(1), pages 77-95.
  12. Jean-François Hennart & Young-Ryeol Park, 1993. "Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States," Management Science, INFORMS, vol. 39(9), pages 1054-1070, September.
  13. Steve Tadelis, 1997. "What's in a Name? Reputation as a Tradeable Asset," Working Papers 97033, Stanford University, Department of Economics.
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