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Georg-August-Universität Göttingen >
cege - Centrum für Europa-, Governance- und Entwicklungsforschung, Universität Göttingen >
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http://hdl.handle.net/10419/22161
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| Title: | | Cross-Border Mergers as Instruments of Comparative Advantage  |
| Authors: | | Neary, J. Peter |
| Issue Date: | | 2004 |
| Series/Report no.: | | CeGE discussion paper 34 |
| 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. |
| Subjects: | | Comparative advantage cross-border mergers GOLE (General Oligopolistic Equilibrium) market integration merger waves |
| JEL: | | L13 F12 F10 |
| Document Type: | | Working Paper |
| Appears in Collections: | | cege-Diskussionspapiere, Universität Göttingen
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