We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
COLLABORATE OR CONSOLIDATE: ASSESSING THE COMPETITIVE EFFECTS OF PRODUCTION JOINT VENTURES.
- Authors
Aguelakakis, Nicolas; Yankelevich, Aleksandr
- Abstract
We analyze collaborations in which two firms facing external competition reorganize to form an input joint venture as an alternative to horizontal merger. Under standard regularity conditions, the collaboration can lead to higher profits than a horizontal merger, though the effect on prices, quantities, and welfare depends on the form of downstream competition. In light of our results regarding profits, we provide reasons why firms might still wish to merge: imperfect information, cost synergies, and organizational asymmetries. We further consider how our comparisons change with the managerial structure of the joint venture (i.e., by delegation of input pricing).
- Subjects
JOINT ventures; MANAGERIAL economics; MERGERS &; acquisitions; CORPORATE profits; CORPORATE reorganizations
- Publication
Economic Inquiry, 2019, Vol 57, Issue 1, p73
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.12707