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Cross-border Mergers and Hollowing-out

Staff Working Paper 2009-30 Oana Secrieru, Marianne Vigneault
The purpose of our paper is to examine the profitability and social desirability of both domestic and foreign mergers in a location-quantity competition model, where we allow for the possibility of hollowing-out of the target firm. We refer to hollowing-out as the situation where the target firm is shut down following a merger with a domestic or foreign acquirer.
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