In reality, horizontal mergers are often driven by the opportunities they create for the exploitation of R&D complementarities. An example is the BP/ ARCO mega-merger, approved in 2000, where a central justification was that integration - by committing the firms to sharing their accumulated...

Multinationals often serve foreign markets by exporting as well as by investing directly in foreign production facilities. We argue that if the multinational competes in an oligopolistic market characterized by strategic complements then there are strategic reasons to use two production...