Horizontal mergers and divestment dynamics in a sunset industry.
Industries with declining demand tend to be riddled with chronic excess capital due to the presence of a business-stealing effect and fixed costs. This article highlights the potential of mergers to internalize this business-stealing effect and thereby promote divestment. Using the case of mergers i...
| Published in: | RAND Journal of Economics (Wiley-Blackwell) Vol. 47; no. 4; pp. 961 - 998 |
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| Format: | Article |
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Wiley-Blackwell
Winter2016
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| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=119457552&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 119457552 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Winter2016 vid: 47 iid: 4 pid: 480 pub: Wiley-Blackwell artinfo: ui: 119457552 10.1111/1756-2171.12161 ppf: 961 ppct: 37 formats: fmt: – @attributes: type: T – @attributes: type: P size: 296KB tig: atl: Horizontal mergers and divestment dynamics in a sunset industry. aug: au: Nishiwaki, Masato affil: Waseda University su: Welfare economics Horizontal merger Consumers' surplus Corporate divestiture Cement industries sug: subj: Welfare economics Cement Manufacturing Other specialty-line building supplies merchant wholesalers Horizontal merger Consumers' surplus Corporate divestiture Cement industries ab: Industries with declining demand tend to be riddled with chronic excess capital due to the presence of a business-stealing effect and fixed costs. This article highlights the potential of mergers to internalize this business-stealing effect and thereby promote divestment. Using the case of mergers in the Japanese cement industry, it examines whether such merger-induced divestment improves total welfare based on a dynamic model of divestment. The findings suggest that merged firms indeed tended to reduce capital more actively and that, as a result of these mergers, total welfare improved despite a reduction in the consumer surplus. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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