Skip to main content

The effect of mergers on the incentive to invest in cost-reducing innovations

Buy Article:

$53.17 plus tax (Refund Policy)


Both mergers and innovation are central elements of a firm's competitive strategy. However, model-theoretical analysis of the merger-innovation link is sparse. The aim of this paper is to analyze the impact of mergers on innovative activities and product market competition in the context of incremental process innovations. Inefficiencies due to organizational problems of mergers are accounted for. We show that optimal investment strategies depend on the resulting market structure and differ significantly from insider to outsider. In our linear model mergers turn out to increase social surplus.

Keywords: G34; L13; L22; O31; horizontal mergers; innovation; market structure; research joint venture

Document Type: Research Article


Affiliations: Technology and Innovation Management Group (Chair: Frank T. Piller),RWTH Aachen University, Kackertstra├če 15-1752072,Aachen, Germany

Publication date: April 1, 2012

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more