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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 dateApr-2011
JournalInternational Review of Economics & Finance
Citation"International Review of Economics & Finance." ISSN 1059-0560. 20:2 (Abr. 2011) 325-341.
Abstract(s)Many policy makers seem to prefer domestic alternatives to cross-border mergers.We construct a model where cross-border mergers drive down union-set wages, domestic mergers have nonlabour cost synergies and 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 by allowing a domestic firm to move production abroad. Restrictive cross-border merger policies can then seriously backfire, since they do not necessarily bring about a domestic merger — but capital flight instead.
Publisher version
AccessOpen access
Appears in Collections:NIPE - Artigos em Revistas de Circulação Internacional com Arbitragem Científica

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