Horizontal mergers and the balance of trade
Article Abstract:
The interconnection between market structure andbalance of trade within a market in which a major producer prevails over industry members was investigated. A model in which a dominant firm competes with minor firms in addition to foreign firms taking into account the efficiency effects of the balance of trade was presented. It was concluded thatif efficiencies are not a factor, the horizontal merger of a dominant firm witha smaller or fringe firm will result in price increases and a degredation of the balance of trade. Substantial efficiencies may, however, result in price decreases and the promote trade balance.
Publication Name: Managerial & Decision Economics
Subject: Economics
ISSN: 0143-6570
Year: 1993
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Vertical mergers and the balance of trade
Article Abstract:
The effects of vertical mergers on the balance of trade and consumers' welfare were examined through a fixed-coefficient technology model. While vertical mergers adversely affect consumers' welfare, welfare deterioration may be mitigated by the improvements in the final good trade. Another important consideration is the production technology used by end-product manufacturers. A vertical merger between a monopolistic distributor and a Cournot end-product manufacturer will result in more beneficial trade balance and improvements in consumers' welfare.
Publication Name: Managerial & Decision Economics
Subject: Economics
ISSN: 0143-6570
Year: 1995
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Is economic efficiency the driving force behind mergers?
Article Abstract:
Many economists are in favor of allowing mergers and acquisitions (M&A) on the grounds of economic efficiency. They believe that M&A promote efficiency when poorly performing corporations are acquired by well-managed corporations. This hypothesis was tested by examining the cumulative excess returns of corporations formerly listed in the New York Stock Exchange from 1926 to 1988. The efficiency hypothesis could not be justified because many firms absorbed did not perform poorly prior to the merger.
Publication Name: Managerial & Decision Economics
Subject: Economics
ISSN: 0143-6570
Year: 1992
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