Firm-productivity and cross border merger
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Related Research Unit(s)
|Journal / Publication||Review of International Economics|
|Online published||5 Nov 2020|
|Publication status||Online published - 5 Nov 2020|
We examine whether higher productivity of a foreign firm increases the incentive for a cross border merger, which is a dominant form of foreign direct investment in recent decades. In line with the empirical evidence, we show that the relationship between productivity of a foreign firm and cross border merger is mixed. We show that the market concentration effect plays an important role in determining the relationship and provides a rationale for a generally ignored empirical evidence showing a negative relationship between firm-productivity and cross border merger. Our results hold under both Cournot and Bertrand competition.
- HORIZONTAL MERGERS, INTERNATIONAL MERGERS, TRADE LIBERALIZATION, ENTRY, FDI, PERFORMANCE, COMPETITION, INVESTMENT, EXPORT, HETEROGENEITY