Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/7758

TitleMergers and capital flight in unionised oligopolies : Is there scope for a 'national champion' policy?
Author(s)Lommerud, Kjell Erik
Meland, Frode
Straume, Odd Rune
KeywordsCross-border merger
National champions
Greenfield FDI
Trade unions
Issue dateMar-2008
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
CitationNIPE Working Paper series; 10
Abstract(s)Many policy makers seem to prefer domestic alternatives to cross-broder mergers. Can such sentiments make sense? We contruct a model where cross-border mergers drive down union-set wages, where domestic mergers have larger non-labour cost synergies than international ones, and where policy evaluators care more about workers than capital owners. Apparently, the stage is set for national champion policies to be sensible. However, we also introduce the possibility of capital flight in the sense that a domestic firm can physically move its production out of the country. Restrictive cross-border merger policies can then seriously backfire, since they do not necessarily bring about a domestic merger - but capital flight instead.
TypeWorking paper
URIhttp://hdl.handle.net/1822/7758
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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