Firm Productivity and Mode of Foreign Expansion: Evidence from Taiwanese Manufacturing Firms
In: Global economic review, Band 45, Heft 4, S. 405-415
ISSN: 1744-3873
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In: Global economic review, Band 45, Heft 4, S. 405-415
ISSN: 1744-3873
In: Journal of international trade & economic development: an international and comparative review, Band 20, Heft 4, S. 429-447
ISSN: 1469-9559
In: Emerging markets, finance and trade: EMFT, Band 57, Heft 10, S. 2888-2906
ISSN: 1558-0938
In: Journal of international trade & economic development: an international and comparative review, Band 23, Heft 3, S. 387-401
ISSN: 1469-9559
In: Bulletin of economic research, Band 62, Heft 3, S. 305-314
ISSN: 1467-8586
ABSTRACTUsing a standard differentiated goods quantity competition setting, we show three facts about horizontal two‐firm mergers that are not true for a homogeneous goods Cournot market. First, merger of two firms is profitable for the merging firms provided that goods are sufficiently distant substitutes. Second, merging of two firms can lead to more two‐firm mergers. Third, an initially non‐profitable two‐firm merger can occur in anticipation of subsequent mergers. These facts imply that mergers are more likely to occur in differentiated goods markets than in homogeneous goods markets.
In: The Manchester School, Band 87, Heft 6, S. 890-901
ISSN: 1467-9957
Ad valorem royalty licensing is implemented when the licensor (i.e., patent‐holding firm) obtains ownership shares in the licensee as payment once the new technology is transferred. In a Cournot duopoly model, we compare two licensing forms between competitors of different productivity, ad valorem and per‐unit royalty licensing. This paper finds that ad valorem royalty licensing is superior to per‐unit royalty licensing for the patent‐holding firm when the cost‐reducing innovation is non‐drastic. The reason for this result is that cross ownership reduces output market competition and thus the patent‐holding firm enjoys better profit margins by strategically setting the share ratio. Furthermore, we show that the relieved competition under ad valorem royalty licensing pulls down the industry output, and thus hurts consumer surplus and social welfare in comparison to per‐unit royalty licensing.
In: The Manchester School, Band 87, Heft 6, S. 890-901
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