Abstract
We study the profitability incentives of 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 here, even though it would not be profitable in a laissez-faire economy. A key element is the change in the governments. incentives to give subsidies to their local firms. National merger induces more strategic trade policy, whereas international merger does not.
| Item Type: | Paper |
|---|---|
| Keywords: | merger incentives; strategic trade policy |
| Faculties: | Economics > Chairs > MPI for Tax Law and Public Finance |
| Subjects: | 300 Social sciences > 330 Economics |
| JEL Classification: | D43, D44, F12, L11, L13, L41 |
| Place of Publication: | München |
| Language: | English |
| Item ID: | 24404 |
| Date Deposited: | 30. Mar 2015, 10:47 |
| Last Modified: | 03. Mar 2017, 10:54 |
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