Spatial Market Expansion through Mergers
16 Pages Posted: 23 Jul 2007
Date Written: March 2006
In this paper we present a model that studies firm mergers in a spatial setting. A new model is formulated that addresses the issue of finding the number of branches that have to be eliminated by a firm after merging with another one, in order to maximize profits. The model is then applied to an example of bank mergers in the city of Barcelona. Finally, a variant of the formulation that introduces competition is presented together with some conclusions.
Keywords: Mergers, facility location, spatial competition
JEL Classification: C61, J80
Suggested Citation: Suggested Citation