Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167525
Authors: 
Federico, Giulio
Langus, Gregor
Valletti, Tommaso M.
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6539
Abstract: 
We analyze the impact of a merger on firms’ incentives to innovate. We show that the merging parties always decrease their innovation efforts post-merger while the outsiders to the merger respond by increasing their effort. A merger tends to reduce overall innovation. Consumers are always worse off after a merger. Our model calls into question the applicability of the “inverted-U” relationship between innovation and competition to a merger setting.
Subjects: 
innovation
R&D
mergers
JEL: 
D43
G34
L40
O30
Document Type: 
Working Paper
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