A simple model of mergers and innovation

Giulio Federico, Gregor Langus, Tommaso Valletti

We analyze the impact of a merger on firms' incentives to innovate. We show that the merging parties always decrease their innovation efforts post-merger while the outsiders to the merger respond by increasing their effort. A merger tends to reduce overall innovation. Consumers are always worse off after a merger. Our model calls into question the applicability of the "inverted-U" relationship between innovation and competition to a merger setting.

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Year of publication:	June 2017
Authors:	Federico, Giulio ; Langus, Gregor ; Valletti, Tommaso M.
Publisher:	Munich : CESifo, Center for Economic Studies & Ifo Institute
Subject:	innovation \| R&D \| mergers \| Fusion \| Merger \| Innovation \| Theorie \| Theory \| Fusionskontrolle \| Merger control \| Übernahme \| Takeover

Extent:	1 Online-Ressource (circa 15 Seiten) Illustrationen
Series:	CESifo working papers. - München : [Verlag nicht ermittelbar], ISSN 2364-1428, ZDB-ID 2065232-X. - Vol. no. 6539
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Other identifiers:	hdl:10419/167525 [Handle]
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance ; L40 - Antitrust Policy. General ; O30 - Technological Change; Research and Development. General
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011669398