A Simple Model of Mergers and Innovation

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:	2017
Authors:	Federico, Giulio
Other Persons:	Langus, Gregor (contributor) ; Valletti, Tommaso M. (contributor)
Publisher:	[2017]: [S.l.] : SSRN
Subject:	Fusion \| Merger \| Innovation \| Theorie \| Theory \| Wohlfahrtsanalyse \| Welfare analysis

Extent:	1 Online-Ressource (15 p)
Series:	CESifo Working Paper Series ; No. 6539
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 29, 2017 erstellt
Other identifiers:	10.2139/ssrn.3005163 [DOI]
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/10012951696