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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 liberalisation. The model predicts that bilateral mergers in which low-cost firms buy out higher-cost foreign rivals are profitable under Cournot competition. With symmetric countries, welfare may rise or fall, though the distribution of income always shifts towards profits. The model implies that trade liberalisation can trigger internation...

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Authors


J. Peter Neary More by this author
Volume:
4325
Publication date:
2004
URN:
uuid:ebd6cbad-b146-4758-bb36-1c3d48530fd8
Local pid:
oai:economics.ouls.ox.ac.uk:11732
Language:
English

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