The search for trading partners and the cross-border merger decision
preprintposted on 2009-11-10, 16:37 authored by Huw EdwardsHuw Edwards, Ben FerrettBen Ferrett
We investigate the merger decision between two firms in an outsourcing relationship, one upstream and the other downstream. The inter-firm relationship is subject both to ex ante matching uncertainty and to contractual efficiency issues. Cross-border merger is assumed to solve the latter problem, but at the expense of curtailing the match-searching process. The trade-off between these two factors is assumed to determine the dynamics of foreign direct investment in this kind of industry.
- Business and Economics
Publisher© Loughborough University
- VoR (Version of Record)
NotesThis is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2009_15.html
Book seriesLoughborough University. Department of Economics. Discussion Paper Series;WP 2009 - 15