Huck, Steffen; Konrad, Kai A.
Merger profitability and trade policy.
In: Scandinavian Journal of Economics, Vol. 106, Nr. 1: S. 107-122
Volltext auf 'Open Access LMU' nicht verfügbar.
We study the profitability incentives for merger and the endogenous industry structure in a strategic trade policy environment. Merger changes the strategic trade policy equlilibrium. We show that merger can be profitable and welfare enhancing, even though it would not be profitable in a laissez-faire economy. A key element is a change in the governments' incentives to give subsidies to their local firms. National merger induces more strategic trade policy, whereas international merger does not. © The editors of the Scandinavian Journal of Economics 2004.