This paper analyses how limited liability and capital size affect a firm's investment for product safety. Firms become bankrupt when their products cause accidents and they cannot compensate for the damages incurred. Relatively small firms obtain greater expected profit because they do not need...

This paper analyses the impact of labour unions on the merger incentives of firms. We find that a horizontal merger takes place if there is some synergy effect. However, a vertical merger takes place only if the synergy effect is bigger than a certain size.