Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Monday, March 30, 2009

The Impact of Firm Size and Market Size Asymmetries on National Mergers in a Three-Country Model

Posted by D. Daniel Sokol

Luis Santos-Pinto (University of Lausanne Faculty of Business and Economics) describes The Impact of Firm Size and Market Size Asymmetries on National Mergers in a Three-Country Model.

ABSTRACT: This paper studies the impact of firm and market size asymmetries on merger decisions. To do that I consider a model where a small and a large country compete in a third (world) market. Each of the two countries has two firms (with potentially different costs) that supply the domestic market and export to the third market. Merger decisions in the two countries are modeled as a simultaneously move game. The paper finds that firms in the large country have more incentives to merge than firms in the small country. In contrast, the government of the large country has more incentives to block a merger than the government of the small country. Thus, the model predicts that conflicts of interest between governments and firms concerning national mergers are more likely in large countries than in small ones.

http://lawprofessors.typepad.com/antitrustprof_blog/2009/03/the-impact-of-firm-size-and-market-size-asymmetries-on-national-mergers-in-a-threecountry-model.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef01156e62ea13970c

Listed below are links to weblogs that reference The Impact of Firm Size and Market Size Asymmetries on National Mergers in a Three-Country Model:

Comments

Post a comment