Resource title

The Effect of Mergers on the Incentive to Invest in Cost Reducing Innovations

Resource image

image for OpenScout resource :: The Effect of Mergers on the Incentive to Invest in Cost Reducing Innovations

Resource description

Both mergers and innovation are central elements of a firm?s competitive strategy. However, model-theoretical analyses of the merger-innovation link is sparse. The aim of this paper is to analyze the impact of mergers on innovative activities and product market competition in the context of incremental process innovations. Inefficiencies due to organizational problems of mergers are accounted for. We show that optimal investment strategies depend on the resulting market structure and differ significantly from insider to outsider. In our linear model mergers turn out to increase social surplus.

Resource author

Robin Kleer

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22366

Resource license

Adapt according to the presented license agreement and reference the original author.