Working paper

Market Structure and Investments : A Progress Report

Yassine Lefouili, and Leonardo Madio

Abstract

This paper examines the impact of changes in market structure on investments. We review recent theoretical and empirical contributions on this issue, starting with the relationship between competition intensity and investments. We then discuss how mergers between competitors affect firms’ incentives to introduce new products and to carry out cost-reducing and quality-enhancing investments. Lastly, we explore how acquiring an innovative entrant can influence investment incentives of both the acquirer and the acquired company.

Keywords

Competition; Investments; Innovation; Mergers; Entry;

JEL codes

  • D43: Oligopoly and Other Forms of Market Imperfection
  • L13: Oligopoly and Other Imperfect Markets
  • L40: General

Reference

Yassine Lefouili, and Leonardo Madio, Market Structure and Investments : A Progress Report, TSE Working Paper, n. 23-1491, November 2023.

See also

Published in

TSE Working Paper, n. 23-1491, November 2023