Spatial Market Expansion through Mergers

16 Pages Posted: 23 Jul 2007

See all articles by Verónica Durán-Carbó

Verónica Durán-Carbó

Universitat Pompeu Fabra

Charles ReVelle

Deceased

Daniel Serra

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Date Written: March 2006

Abstract

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

Durán-Carbó, Verónica and ReVelle (deceased), Charles and Serra, Daniel, Spatial Market Expansion through Mergers (March 2006). Available at SSRN: https://ssrn.com/abstract=1002301 or http://dx.doi.org/10.2139/ssrn.1002301

Verónica Durán-Carbó

Universitat Pompeu Fabra

Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain

Daniel Serra (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 16 66 (Phone)
(34) 93 542 17 46 (Fax)

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