This paper offers an explanation for multinationals that are both horizontally and vertically related. Specifically, when labor is unionized, the conventional incentives for merger may disappear in industries of successive (or bilateral) monopoly, due to a hidden effect of "double...

This paper models the interactions of a labor union and a monopoly firm under an import quota in a small open economy. The distorted equilibrium is depicted in a diagram, in which wages and employment in both sectors, and the monopoly rent can be identified. The imposition of an import quota in...