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Horizontal mergers and the balance of trade
Author(s) -
Kaserman David L.,
Melese Francois
Publication year - 1993
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090140111
Subject(s) - balance (ability) , economics , balance of trade , international economics , horizontal and vertical , balance sheet , monetary economics , geometry , mathematics , biology , finance , neuroscience
This paper explores the relationship between market structure and the balance of trade in a dominant firm/competitive fringe model. It is shown that, absent efficiency effects, a horizontal merger between the dominant producer and a domestic fringe firm leads to a deterioration in the balance of trade, but, where efficiencies arise, this effect may be reversed. A sufficient condition for such reversal to occur is derived.