A model of conglomeration and synergy traps
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- dc.contributor.author Oliva, M. Àngelsca
- dc.contributor.author Rivera-Bátiz, Luisca
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2017-07-26T10:50:14Z
- dc.date.available 2017-07-26T10:50:14Z
- dc.date.issued 1997-08-01
- dc.date.modified 2017-07-23T02:03:11Z
- dc.description.abstract We present a model of conglomeration motivated by technology synergies and strategic reductions in variable costs in the face of competitive pressures. The resulting firm integration is neither horizontal nor vertical but rather congeneric integration of firms in related industries. We endogenize the industrial conglomeration structure and examine the effects of competition between conglomerates, and between a conglomerate and independent firms. We show that there is an equilibrium synergy trap in which conglomerates are formed to exploit economies of scope, but resulting profits are lower than under the status quo. We also show that strategic firm integration can occur even in the presence of diseconomies of scope. The model helps to explain features of recent mergers and acquisitions experience.
- dc.format.mimetype application/pdfca
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=232
- dc.identifier.uri http://hdl.handle.net/10230/1179
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 232
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword conglomerate
- dc.subject.keyword integration
- dc.subject.keyword synergy
- dc.subject.keyword strategy
- dc.subject.keyword Finance and Accounting
- dc.title A model of conglomeration and synergy trapsca
- dc.type info:eu-repo/semantics/workingPaper