Journal article
Cross-border mergers as instruments of comparative advantage
- Abstract:
- A two-country model of oligopoly in general equilibrium is used to show how changes in market structure accompany the process of trade and capital-market liberalization. The model predicts that bilateral mergers in which low-cost firms buy out higher-cost foreign rivals are profitable under Cournot competition. As a result, trade liberalization can trigger international merger waves, in the process encouraging countries to specialize and trade more in accordance with comparative advantage. With symmetric countries, welfare is likely to rise, though the distribution of income always shifts towards profits.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
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Access Document
- Publisher copy:
- 10.1111/j.1467-937X.2007.00466.x
Authors
- Publisher:
- Blackwell Publishing
- Journal:
- Review of Economic Studies More from this journal
- Volume:
- 74
- Issue:
- 4
- Pages:
- 1229-1257
- Publication date:
- 2007-10-01
- DOI:
- EISSN:
-
1467-937X
- ISSN:
-
0034-6527
- Language:
-
English
- Keywords:
- Subjects:
- UUID:
-
uuid:4648f49c-0679-40b8-aeb3-88c50ffbb185
- Local pid:
-
ora:2108
- Deposit date:
-
2008-06-19
- ARK identifier:
Terms of use
- Copyright holder:
- The Review of Economic Studies Limited
- Copyright date:
- 2007
- Notes:
- The full-text of this article is not available in ORA at this time. Citation: Neary, J. P. (2007). 'Cross-border mergers as instruments of comparative advantage', Review of Economic Studies, 74(4), 1229-1257. [The definitive version is available at www.blackwell-synergy.com.]
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