Can a Merger Take Place among Symmetric Firms?

Author

Mahelet G. Fikru, Missouri University of Science and TechnologyFollow
Sajal Lahiri

Abstract

The literature on mergers and acquisitions shows that a merger among identical firms does not take place because it is not profitable. This study forms a theoretical framework for understanding mergers among identical firms in a pollution-intensive sector. When a merger occurs the market structure changes and so do optimal environmental policies. This flexibility in policy provides the incentive to merge even if there are no efficiency gains.

Recommended Citation

Fikru, M. G., & Lahiri, S. (2013). Can a Merger Take Place among Symmetric Firms?. Studies in Microeconomics, 1(2), pp. 155-162. SAGE Publications Ltd.

The definitive version is available at https://doi.org/10.1177/2321022213501255

Department(s)

Economics

Keywords and Phrases

emission tax; flexible policy; market structure; merger; Polluting firms; symmetric firms

International Standard Serial Number (ISSN)

2321-0222

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2013 SAGE Publications Ltd, All rights reserved.

Publication Date

01 Dec 2013