Horizontal Merger under Strategic Tax Policy

We show that the presence of a strategic tax policy increases the incentive for a horizontal merger compared to the situation with no tax policy. Thus, we point towards a new factor, viz., strategic tax policy, for increasing the incentive for a horizontal merger that has been ignored in the existing literature. In contrast to the usual belief, we also show that a horizontal merger may benefit the consumers and the society.

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Year of publication:	2014
Authors:	Liu, Chih-Chen ; Mukherjee, Arijit ; Wang, Leonard F.S.
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	merger \| tax policy \| social welfare

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Series:	CESifo Working Paper ; 4996
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	798328029 [GVK] hdl:10419/103103 [Handle] RePec:ces:ceswps:_4996 [RePEc]
Classification:	L13 - Oligopoly and Other Imperfect Markets ; D43 - Oligopoly and Other Forms of Market Imperfection
Source:	EconStor

Persistent link: https://www.econbiz.de/10010420704