The international drivers of domestic airline mergers in twenty nations: integrating industrial organization and international business
✍ Scribed by Joseph A. Clougherty
- Publisher
- John Wiley and Sons
- Year
- 2005
- Tongue
- English
- Weight
- 193 KB
- Volume
- 27
- Category
- Article
- ISSN
- 0143-6570
- DOI
- 10.1002/mde.1248
No coin nor oath required. For personal study only.
✦ Synopsis
Abstract
The domestic airline merger phenomenon of the late 1980s and early 1990s sparked a great deal of Industrial Organization (IO) literature; yet, that literature neglected non‐US domestic mergers and potential for international competitive gains. Using an International Business perspective to complement an IO analysis, I argue that factoring international competitive incentives helps explain domestic airline merger activity. A Cournot model of airline competition illustrates that domestic mergers, via enhanced domestic networks and reduced domestic competition, generate international competitive gains. Further, empirical tests—using a structural equations approach on panel data covering interhyphen‐national city‐pair market segments—support domestic mergers improving international competitiveness. Copyright © 2006 John Wiley & Sons, Ltd.