Horizontal mergers and divestment dynamics in a sunset industry

• 成果类型: Article
• 署名作者: Nishiwaki, Masato
• 署名单位: Waseda University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12161
• 发表日期: 2016
• 页码: 961-997
• 关键词: EMPIRICAL-ANALYSIS; wal-mart; EXIT; estimators; MARKETS; models; COMPETITION; simulation; economies

摘要

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.