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Horizontal M&a Effects Research Based On Merger Simulation Technology

Posted on:2010-10-07Degree:MasterType:Thesis
Country:ChinaCandidate:J WeiFull Text:PDF
GTID:2199330332467918Subject:National Economics
Abstract/Summary:PDF Full Text Request
Activity of Merger & Acquisitions is the inevitable result of market economy and an effective way of optimizing national industry structure.Since the end of 19th century,there have been several tides of enterprise annexation which have influenced the economic development of western countries.Recently in China,there is also new break-through both on the scale and the M&A way.M&A is also affecting the economic development of our country more deeply.At the same time,economists have explained the activity of takeover in different ways,and this have caused the formation of variable theories.The M&A has become one of the most active theory research fields in foreign economics.In this field,related studies mainly center on M&A's enterprises impacts and welfare effects.When it comes to the perspective of government regulation, more attentions must be paid to M&A macro-economic effects, especially the price and total welfare which includes consumer surplus and producer surplus.Based on existing economic theory of M&A, This paper firstly analyses the horizontal M&A effects to market concentration,scale economics, competition, social welfare etc.Then,by dint of the idea of experimental economic,the "simulation technology" is brought in.By using a merger simulation model deduced by a standard Cournot model,price and total welfare effects of merger cases can be simulated.In the empirical part,by chosing the iron industry,which is one of the nine industries the government stresses on,we directly simulated the price and total welfare effects of several mergers of iron companies in China.Empirical result shows that M&A can make product price increase.It also has positive impact to producer profits and negative impact to consumer welfare.The impact degree is related with market concentration, enterprise scale, price elasticity,marginal cost as well as merger synergy. According to the conclusion,we give some policy advices,especially the factors which should be considered when a merger case is evaluated to the relative government departments.
Keywords/Search Tags:Horizontal M&A, Merger simulation, Price effects, Welfare effects, Iron and steel industry
PDF Full Text Request
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