Mergers and the Incentives to Undertake Product Innovation Oriented R&D: First Steps Towards an Assessment Approach

38 Pages Posted: 3 Mar 2014

See all articles by Benjamin R. Kern

Benjamin R. Kern

Karlsruhe University of Applied Sciences ; Philipps University Marburg - School of Business Administration and Economics

Juan Mantilla Contreras

Independent

Date Written: March 1, 2014

Abstract

The firms that compete with one another in terms of innovation do not necessarily coincide with the relevant competitors on pre-innovation product markets. As a consequence, the findings about the ambiguous interrelation between (product) market concentration and innovation cannot be transferred one-to-one to the interrelationship between innovation competition and innovation. By identifying and classifying the most relevant effects, which are decisive for the impact of mergers on the incentives to invest in product innovation oriented R&D, we will demonstrate that the interrelation between innovation competition and innovation is not always as unclear as it seems. Hence, by analyzing the model-theoretic industrial organization literature, this article aims to contribute to the discussion about the development of a decision theoretic assessment framework for analyzing the impact of mergers on innovation and is therefore also in line with the idea of a rule-based competition policy which is, from a law and economics perspective, ought to reduce error costs, give legal guidance and reduce legal uncertainty.

Keywords: Competition Policy, Antitrust, Merger Review, Innovation Market Analysis, Innovation Competition, Innovation

JEL Classification: K21, L12, L41, O31

Suggested Citation

Kern, Benjamin René and Mantilla Contreras, Juan, Mergers and the Incentives to Undertake Product Innovation Oriented R&D: First Steps Towards an Assessment Approach (March 1, 2014). Available at SSRN: https://ssrn.com/abstract=2403259 or http://dx.doi.org/10.2139/ssrn.2403259

Benjamin René Kern (Contact Author)

Karlsruhe University of Applied Sciences ( email )

Karlsruhe
Germany

HOME PAGE: http://https://www.hs-karlsruhe.de/w/ueber-uns/personen/professorinnen/

Philipps University Marburg - School of Business Administration and Economics ( email )

Universitätsstrasse 24
Marburg, D-35032
Germany

Juan Mantilla Contreras

Independent ( email )

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