Merger policy and tax competition

Arbeitspapier

In many situations governments have sector-specific tax and regulation policies at their disposal to influence the market outcome after a national or an international merger has taken place. In this paper we study the implications for merger policy when countries non-cooperatively deploy production-based taxes. We find that whether national or international mergers are more likely to be enacted in the presence of nationally optimal tax policies depends crucially on the ownership structure of firms. When all firms are owned domestically in the pre-merger situation, non-cooperative tax policies are more efficient in the national merger case and smaller synergy effects are needed for this type of merger to be proposed and cleared. These results are reversed when there is a high degree of foreign firm ownership prior to the merger.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2157

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Intergovernmental Relations; Federalism; Secession ; Oligopoly and Other Imperfect Markets ; Regulation and Industrial Policy: General
• Subject: merger regulation ; tax competition ; Fusionskontrolle ; Steuerwettbewerb ; Eigentümerstruktur ; Optimale Besteuerung ; Duopol ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Haufler, Andreas ; Schulte, Christian
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/26201