We re-examine the common wisdom that cross-border mergers are the most effective merger strategy for firms facing … powerful unions. In contrast, we obtain a domestic merger outcome whenever firms are sufficiently heterogeneous (in terms of … productive efficiency and product differentiation). A domestic merger unfolds a "wage-unifying" effect which limits the union …

We examine how a downstream merger affects input prices and, in turn, the profitability of a such a merger under … unions organising workers. If the input suppliers are plant-specific, we find that a merger is more profitable than in a … take part in a merger than being an outsider. For firm-specific input suppliers, on the other hand, results are reversed …