Options
Cross-border mergers as instruments of comparative advantage
Author(s)
Date Issued
2004-03-01
Date Available
2009-07-24T13:39:35Z
Abstract
A two-country model of oligopoly in general equilibrium is used to show how changes
in market structure accompany the process of trade and capital market liberalisation. The
model predicts that bilateral mergers in which low-cost firms buy out higher-cost foreign rivals are profitable under Cournot competition. With symmetric countries, welfare may rise or fall, though the distribution of income always shifts towards profits. The model implies that trade liberalisation can trigger international merger waves, in the process encouraging
countries to specialise and trade more in accordance with comparative advantage.
Sponsorship
European Commission
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP04/04
Classification
F10
F12
L13
Subject – LCSH
Competition, Imperfect
Comparative advantage (International trade)
Oligopolies
Consolidation and merger of corporations
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
File(s)
Owning collection
Views
1872
Last Month
2
2
Acquisition Date
Mar 28, 2024
Mar 28, 2024
Downloads
972
Last Week
1
1
Last Month
6
6
Acquisition Date
Mar 28, 2024
Mar 28, 2024