Template-Type: ReDIF-Paper 1.0

Author-Name: Andreas Haufler
Author-X-Name-First: Andreas
Author-X-Name-Last: Haufler

Author-Name: Christian Schulte
Author-X-Name-First: Christian
Author-X-Name-Last: Schulte

Title: Merger Policy and Tax Competition

Abstract: In many situations governments have sector-specific tax and regulation poli-
cies at their disposal to in°uence 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 en-
acted 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.
Length:  35 pages
Creation-Date:  2007-11
File-URL: http://www.bgpe.de/texte/DP/035_haufler_schulte.pdf
File-Format: Application/pdf
File-Function: First version, 2007
Number: 035
Classification-JEL: H21, H77, L13, L50
Keywords: merger regulation, tax competition
Handle: RePEc:bav:wpaper:035_haufler_schulte