Mergers and innovation portfolios

• 成果类型: Article
• 署名作者: Moraga-Gonzalez, Jose Luis; Motchenkova, Evgenia; Nevrekar, Saish
• 署名单位: Vrije Universiteit Amsterdam; University of Zurich; Tinbergen Institute; IMT - Institut Mines-Telecom; Institut Polytechnique de Paris; Telecom Paris; Centre for Economic Policy Research - UK; University of Navarra; Tilburg University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12426
• 发表日期: 2022
• 页码: 641-677
• 关键词: horizontal mergers; COMPETITION; cournot; equilibria; direction; size; firm

摘要

This article studies mergers in markets where firms invest in a portfolio of research projects of different profitability and social value. The investment of a firm in one project imposes both a negative business-stealing and a positive business-giving externality on the rival firms. We show that when the project that is relatively more profitable for the firms appropriates a larger (smaller) fraction of the social surplus, a merger increases (decreases) consumer welfare by reducing investment in the most profitable project and increasing investment in the alternative project. The innovation portfolio effects of mergers may dominate the usual market power effects.