2014 Fiscal Year Final Research Report
Evaluating the welfare effects of mergers using advanced empirical models
| Project/Area Number |
24730202
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Multi-year Fund |
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| Research Field |
Applied economics
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| Research Institution | Waseda University (2014)
National Graduate Institute for Policy Studies (2012-2013) |
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Principal Investigator |
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| Project Period (FY) |
2012-04-01 – 2015-03-31
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| Keywords | 企業結合 / 実証研究 |
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| Outline of Final Research Achievements |
In this project, two empirical analyses were conducted. The first one is an empirical analysis of horizontal mergers (in a declining industry) using a dynamic oligopoly model and an estimation method of dynamic games. In this research, I developed a model of divestment and use it to evaluate the welfare impact of mergers in the Japanese cement industry. The main result is that merged firms indeed more actively divested their capital assets and, as a result of the mergers, total welfare improved despite a reduction in the consumer surplus.
The second one is an analysis of multi-plant firms' divestment and production reallocation. I found that the divestment pattern has lead to a substantial drop in industry-wide allocative efficiency, largest part of which is explained by the misallocation of production across firms not within a firm. This result suggests that the presence of multi-plant (merged) firms can help to alleviate the inefficiency.
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| Free Research Field |
実証産業組織論
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