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Title:The Effect of Mergers on the Incentive to Invest in Cost Reducing Innovations PDF Logo
Authors:Kleer, Robin
Issue Date:2006
Series/Report no.:Würzburg economic papers 73
Abstract:Both mergers and innovation are central elements of a firm?s competitive strategy. However, model-theoretical analyses of the merger-innovation link is sparse. The aim of this paper is to analyze the impact of mergers on innovative activities and product market competition in the context of incremental process innovations. Inefficiencies due to organizational problems of mergers are accounted for. We show that optimal investment strategies depend on the resulting market structure and differ significantly from insider to outsider. In our linear model mergers turn out to increase social surplus.
Subjects:Horizontal mergers
innovation
research joint venture
market structure
JEL:G34
O31
L22
L13
Document Type:Working Paper
Appears in Collections:W.E.P. - Würzburg Economic Papers, Lst. f. VWL, Geld u. internat. Wirtschaftsbeziehungen, Universität Würzburg

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