Merger and process innovation

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

4 Scopus Citations
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Author(s)

  • Arijit Mukherjee

Detail(s)

Original languageEnglish
Article number110366
Journal / PublicationEconomics Letters
Volume213
Online published11 Feb 2022
Publication statusPublished - Apr 2022
Externally publishedYes

Link(s)

Abstract

Denicolò and Polo (2018) show that the result of Federico et al. (2017), i.e., horizontal mergers reduce R&D investments of the merged firms compared to non-cooperation, holds provided the probability of failure in R&D is log-convex in R&D investments. We provide a different reason for innovation raising merger. We show that if firms invest in process innovation, merger may increase R&D investments even if the probability of failure in R&D is log-convex in R&D investments as considered in Federico et al. (2017). We also show that merger may increase expected consumer surplus and expected welfare compared to non-cooperation. Our results are important for antitrust policies.

Research Area(s)

  • Innovation, Merger, Welfare

Citation Format(s)

Merger and process innovation. / Mukherjee, Arijit.
In: Economics Letters, Vol. 213, 110366, 04.2022.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

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