Abstract
This paper is concerned with the effect of horizontal mergers in an open economy environment. It is found that, with the presence of economics of scale and imperfect competition, a domestic merger may bring about an additional gain to the country in that it shifts profit from foreign to domestic firms. Consequently, the condition on the degree of economics of scale for permitting domestic horizontal mergers would be weaker under an open economy than under a closed economy. Furthermore, the analysis shows that such mergers can also raise foreign welfare. Finally, the model is used to discuss the need to coordinate merger policies among trading partners in tandem with trade liberalization.
| Original language | English |
|---|---|
| Pages (from-to) | 359-376 |
| Journal | Pacific Economic Review |
| Volume | 7 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2002 |
Bibliographical note
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