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- Title
Conglomerate Mergers and Optimal Investment Policy.
- Authors
Shapiro, David L.
- Abstract
A question that bedevils the academic economist, the trustbuster, and the community at large is whether conglomerate merger activity is a force for good or evil. In common with horizontal and vertical merger activity, the critical consideration is whether conglomerate mergers produce better uses of resources, increases in monopoly power, or some mixture of these two results. Economists have been examining these mergers in an effort to determine whether efficiency in the use of resources is, in fact, promoted. However, when investigating this question, the subject of inquiry is usually confined to the optimizing decision of the firm. It has been argued that conglomerate activity involves the best use of resources from the standpoint of the firm.
- Subjects
CONGLOMERATE corporations; INVESTMENT policy; HORIZONTAL merger; VERTICAL merger; MONOPOLIES; RESOURCE-based theory of the firm; STAKEHOLDERS
- Publication
Journal of Financial & Quantitative Analysis, 1970, Vol 4, Issue 5, p643
- ISSN
0022-1090
- Publication type
Article
- DOI
10.2307/2330118