Can a Merger Take Place Among Symmetric Firms?

9 Pages Posted: 8 Mar 2011

See all articles by Mahelet Fikru

Mahelet Fikru

Missouri University of Science and Technology - Department of Economics

Sajal Lahiri

Southern Illinois University Carbondale - Department of Economics

Date Written: March 8, 2011

Abstract

The literature on mergers and acquisitions shows that a merger among identical firms is not profitable. This study develops a theoretical framework for understanding mergers among identical firms in a pollution-intensive sector. We show that if environmental policies adjust with a change in market structure because of a merger, such a merger can be profitable.

Keywords: flexible policy, emission tax, merger, symmetric firm

JEL Classification: D43, G34, L13, H21

Suggested Citation

Fikru, Mahelet and Lahiri, Sajal, Can a Merger Take Place Among Symmetric Firms? (March 8, 2011). Available at SSRN: https://ssrn.com/abstract=1781228 or http://dx.doi.org/10.2139/ssrn.1781228

Mahelet Fikru

Missouri University of Science and Technology - Department of Economics ( email )

1870 Miner Circle
Rolla, MO 65409-1250
United States

Sajal Lahiri (Contact Author)

Southern Illinois University Carbondale - Department of Economics ( email )

MC 415
1000 Faner Drive
Carbondale, IL 62901
United States

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