Mergers in Patent Contest Models with Synergies and Spillovers

We consider mergers in an innovation contest between n firms in the presence of synergetic effects. We assume that a merger may affect the R&D efficiency of the merging firm due to increasing returns to scale in R&D. We show that mergers are beneficial for the merging firms even if the efficiency gains of the merging firms are not substantial, and that merging reduces R&D costs by only 6%. We also consider the influence of unintended knowledge flows in R&D. In the presence of knowledge spillovers, we show that higher efficiency gains are needed to make the merger profitable

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Year of publication:	2015
Authors:	Jost, Peter J. ; van der Velden, Claus
Publisher:	[S.l.] : SSRN
Subject:	Patent \| Fusion \| Merger \| Spillover-Effekt \| Spillover effect \| Industrieforschung \| Industrial research \| Übernahme \| Takeover \| Spieltheorie \| Game theory \| Synergie \| Synergy \| Innovation